Moscow, 26 August India and Russia are expected to discuss crucial defence and security issues during National Security Adviser M K Narayanan’s two-day visit here beginning from tomorrow.
The issue of price escalation of the Russian defence supplies is also likely to figure in the talks between the two sides during Narayanan’s stay here.
Narayanan is to hold parleys with Russian Defence Minister Anatoly Serdyukov and his counterpart - Acting Secretary of the National Security Council Valentin Sobolev.
The officials on both sides are tight-lipped about Naryanan’s agenda in Moscow, saying the visits of National Security Advisers ahead of regular India-Russia summits to set the sensitive security and defence agenda are a usual affair.
However, this time several irritants have emerged ahead of the November talks between Prime Minister Manmohan Singh and President Vladimir Putin, including Russia’s demand to revise upward the price of already concluded defence deals due to cost escalation caused by the drop of US dollar and unprecedented rise of rouble.
A Russian team was in New Delhi earlier this month to continue negotiations and Narayanan’s talks with Defence Minister Serdyukov could break the deadlock.
This issue was discussed prominently by Defence Secretary Shekhar Dutt during his three-day Moscow visit in May and Defence Minister A K Antony is reported to have written in confidence to his Russian counterpart about India’s fresh proposals.
Under the $8.5 billion Sukhoi deal said to be the largest single involving deep transfer of technology, Russia’s Irkut Corporation has supplied 60 Su-30MKI multi-role fighters and is willing to go ahead with the delivery of 40 aircraft at the current cost escalation rate of 2.55% per annum.
But, it wants to double the cost escalation rate to 5% per annum for the remaining supplies of 138 kits for the assembly at Hindustan Aeronautics Limited (HAL). If India accepts Russian demand the cost of Sukhoi deal would go up by another half a billion dollars.
The Gorshkov aircraft carrier package is also the major deal which Moscow wants to revise along with scores of smaller deals due to cost overruns following drop in dollar value, strengthening of the national currency and double digit inflation in the country.
Antony yesterday told reporters in Gwalior that Russia has assured India that “serious” attempts were being made to keep all armament deliveries on schedule. “Such an assurance has been given on Government-to-Government basis,” he said.