The main result of the meeting between Russian President Dmitry Medvedev and Indian President Pratibha Patil in the Kremlin yesterday was progress in the dispute over the cost of modernizing the Admiral Gorshkov (INS Vikramatidya) aircraft carrier for the Indian Navy.
The two presidents did not however sign any documents after their meeting. New agreements will be signed in December, when Indian Prime Minister Manmohan Singh, who holds the reins in India, comes to Moscow.
Although the president is largely a figurehead in India, Patil discussed several important issues with Medvedev, including the aircraft carrier.
Russian shipyard Sevmash has been modernizing the warship at the request of the Indian Defense Ministry since 2004. Initially, the contract was assessed at $750 million and India was to pay another $750 million for 16 deck-based MiG-29K fighter planes. The aircraft carrier, to be renamed INS Vikramaditya, was to be delivered to the Indian navy in 2012.
But some time ago Sevmash said the contract was worth much more, about $2.5 billion without the aircraft. India said it would not pay.
Sergei Chemezov, head of the Russian Technologies state corporation, and Nikolai Makarov, chief of Russia's General Staff, said yesterday that Russia and India had settled all disputes and expected the problem to be resolved in October.
The newspaper's sources are more cautious, though.
"Not all the disputed issues have been settled, and the signing of the documents in October is not guaranteed, but we may be ready to do so by December," said a source close to the talks.
Analysts say that India cannot walk out at this stage of the talks, which explains the latest progress.
Konstantin Makiyenko, deputy director of the Russian Center for Analysis of Strategies and Technologies, said: "If India gives up the project now, it will not get the aircraft carrier, and even reimbursement of the funds and payment of penalties by Russia will not compensate the loss of time."
A brand-new aircraft carrier would cost India much more than modernization of the Admiral Gorshkov.
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