File photo of Prime Minister Narendra Modi with President of Russian Federation, Vladimir Putin, at Sochi, Russia. (Source: PTI)

India, Russia Finalise $500-Million Warship Deal 

India and Russia on Tuesday sealed a $500 million deal for construction of two missile frigates in Goa for the Indian Navy, an official said.

Officials said the agreement for manufacturing of the two Talvar-class warships was signed between defence public sector undertaking Goa Shipyard Ltd. and Russia's state-run defence major Rosoboronexport under the government-to-government framework for defence cooperation.

Under the deal, Russia will provide design, technology knowhow and key materials to GSL for construction of the ships in India. The ships will be fitted with most advanced missiles and other weapon systems, they said.

"We have finalised a $500 million deal with Russia for construction of two warships in Goa," Chairman and Managing Director of Goa Shipyard Shekhar Mital said.

He said construction of the ships will begin in 2020 and the first one will be ready for induction in 2026 while second one will be ready by 2027. The two sides already finalised another deal amounting to around $1 billion under which Russia will supply two frigates to India by 2023.

The agreement came nearly six weeks after India signed up with Russia to buy a batch of S-400 air defence missile systems at for around $5 billion.

India is going ahead with mega defence deals with Russia disregarding warnings by the U.S. of sanctions. The Trump administration has put several Russian firms under sanctions under Countering America's Adversaries Through Sanctions Act.

The U.S. said that countries engaged with Russia's defence firms may also face actions under CAATSA. India has been hoping to get a waiver from the U.S. on the deals it was signing with Russia. Russia has been India's largest defence supplier. The defence and security cooperation has been on an upswing between the two countries in the last few years.

On Monday, Russian defence major Rosoboronexport emerged as the lowest bidder in the Indian Army's tender for procurement of a batch of short-range air defence missile systems, official sources said.

The other contenders for the deal were Swedish firm SAAB and French military firm MBDA. The size of the contract is likely to be around $3 billion.