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India, Russia try to resolve Gorshkov impasse
By Vivek Raghuvanshi
12 March 2009

NEW DELHI - Officials from Russia's Sevmash shipyard are here for talks March 9-13 to resolve cost issues regarding the refit and transfer of the Russian aircraft carrier Admiral Gorshkov to the Indian Navy, but some Navy officials have suggested the work be done in India.

Under a deal signed in 2005, the Gorshkov was to be delivered free but with a refit cost of about $700 million. However, the Russians are now demanding $2.9 billion for Gorshkov and the Indian side has refused. The original cost of the carrier, including 16 MiG-29K aircraft, was around $1.5 billion.

Indian Navy sources said they want an early conclusion of the deal, and have suggested to the Defence Ministry to have the work done at Indian facilities so the stalemate could be resolved.

Ever since Moscow demanded an increase in price for the Gorshkov in early 2007, strains have emerged in defense ties between the two countries. Moscow is taking a hard position on every defense deal agreed during the last two to three years, said a Defence Ministry official.