Russia » Economics
Author`s name Dmitriy Sudakov

Russia’s defense cooperation with India to bring billions of profit

Even in the conditions when the specific share of the Indian deals in the Russian military cooperation with the foreign nations declines, the absolute numbers are growing. With the aim of preserving its positions on the Indian market Russia tries to pass over from simple trade to joint Russian-Indian developments and manufacture, which have reached unprecedented level. The following out of well-known and the just agreed projects should be pointed out first of all: creating high precision weapons, in particular BrahMos missiles; manufacturing multi-purpose transport and multipurpose (5th generation) fighter aircraft; submarines "Amur"; license manufacturing of T-90S tanks and complex modernization of Т-72М1; forming the system of non-strategic anti-missile defense of India.

This year the parties managed to reach "obvious dynamics" in the project of joint creation of the 5th generation aircraft. This agreement may be regarded as a landmark event, as India became the only strategic foreign partner of Russia in the 5th generation projects. In the near future a special intergovernmental agreement is to formalize technical arrangements reached by the specialists.

The potential of the joint fifth generation combat aircraft will essentially increase as a result of the cooperation between Russian and Indian industries, according to the general director of Sukhoi, Russian “head” design bureau running the project, Michael Pogosyan. "After achievement of the political agreement about the joint project together with India we count on reducing the terms of its implementation and essential increase of its export potential". Russian-Indian intergovernmental agreement on this aircraft assumes equal contribution of the parties. It will be a 50:50 cooperation both in terms of intellectual property, resources and money. In the long term together with India the upgrades of the plane will take place, including of its ship version.

Another very intriguing joint project is hypersonic technologies. According to the assessments by different top designers of the military sector voiced at different specialized conferences Russia’s military technologies can be roughly divided into three groups: 10% higher than the world level, 10% lower than the best international achievements and about 80% on the level of the best foreign matches. Hypersonic speed was listed in the fist group. Recently India and Russia began joint research and development on creating the perspective hypersonic cruise missile, next to the existing BrahMos. At the moment BrahMos, the hit of the international shows, has naval, ground at air versions.

In the beginning of this year Russia suggested India to finish together the attack helicopter Ka-52 Alligator. Alligator is the helicopter next to famous Black Shark Ka-50. Black Shark’s version Erdogan participated in the Turkish tender, where, according to Kamov’s general designer Sergey Miheev it technically beat the US competitor Bell “everywhere they were compared”. (Due to the unprecedented political pressure from the USA the tender has been suspended). In Russia Ka-50 and Ka-52 are entering serial manufacturing in limited numbers for special missions. Now this helicopter may have a far more reaching future together with the Indian AF and in the international market. Also recently Indians were offered to finish Ka-60, and take part in the research and development of the 10-ton class helicopter of the following generation. In these talks India is also suggested the right of re-export in the third countries.

Meanwhile the “daily” cooperation between the two states also got principally new shades. Moscow tries to remove the problems sometimes taking place with the deliveries of the military equipment, spare parts and after-sale services. In this field the parties also realized that the regularity of the supply of spare parts depends not only on the supplier, but also on the consumer. Joint Russian-Indian enterprises on repair and services were created to solve this problem. In particular, the recently created joint venture IRAL deals with aviation services, Rosoboronservice renders naval services. Besides, Russian company Aviazapchast (aviation spares) and Indian corporation HAL concluded the contract on the delivery and repair of aircraft. According to Russian official statements Russian companies are working on creating in India the service centers which can ensure practically continuous monitoring of the process of operation of the Russian made hardware and timely react to the needs.

Funny, but the only problem of the mutual military-technical cooperation is the shrinking US dollar… At the moment there is such a problem as fluctuation of the rates of the Russian ruble, Indian rupee and US dollar, which result in significant potential profitability decrease of the long-term contracts of the Russian companies. Therefore sometimes there are conflicts of interests between Indian and Russian partners when the former want to get from the latter two-three years old dollar prices. In the near future the parties agreed to hold talks on introducing so-called protective currency clauses, allowing for leveling up the currency fluctuations. It is based on linking the contracts not only to dollar prices, but to a “basket of currencies”.

Yuri Seleznyov