Diplomatic and Military Affairs

Russia eyeing $3b in arms contracts

Updated: 2011-08-05 07:57

By Thomas Grove

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MOSCOW - Russia, the world's second largest arms exporter, may seal three new orders worth more than $3 billion for fighter aircraft over the next year, the top Russian defense think tank CAST said on Thursday.

The new orders would be a boon to an industry which has watched its export market shrink after the Arab Spring revolutions and been criticized at home by President Dmitry Medvedev over the quality of its weapons systems.

India is looking to sign a new $2 billion contract for 40 Sukhoi-30MKIs, according to CAST data, and the Russian Defense Ministry itself may soon sign a deal for 24 Mikoyan-29Ks to renew the aging fleet on its sole aircraft carrier.

"There is a very strong chance that the Indian air force may sign a contract to buy up to 40 Su-30MKI fighters, even by the end of this year," CAST Director Ruslan Pukhov said.

The Su-30MKI was developed by both Russia and Hindustan Aeronautics, and travels at 2,080 kilometers per hour at altitude.

"They can't get enough of Russian arms," Pukhov said of India.

Russia eyeing $3b in arms contracts

India has been the top importer of Russian arms, and the two countries are working on a fifth-generation fighter in a deal reported to be worth around $35 billion.

Delivery of the supersonic jet is expected to begin in 2017. A Russian fighter was cut from the shortlist in an $11 billion fighter tender in April in favor of two European variants.

"There was a political component to their decision. They knew that they were buying too many arms from the Russians and they knew for diplomatic reasons they had to start balancing out their suppliers," said Pukhov.

The $960 million contract for 24 Mi-29Ks, expected to be signed next year, is for Russia's aircraft carrier, which currently relies on outdated Su-33 planes.

Another deal will be for six Yak-130 light attack aircraft originally intended for Libya before the United Nations imposed an arms embargo on Tripoli, cutting Moscow off from $2 billion in signed deals and another $2 billion in potential contracts.

The top customer for the light attack aircraft is Kazakhstan which is trying to boost its regional clout, Pukhov said, citing defense industry sources.

Russia's arms exports rose to a near-record $10 billion last year and are expected to stay around there for the next few years - though Middle East violence has since threatened those forecasts.

Besides civil war in Libya and uprisings in Syria, Arab Spring revolutions have forced many of Russia's Middle East and North African customers to spend state revenues on social programs instead of Russian rockets and tanks.

Threats by President Medvedev to buy arms from abroad if the quality of Russian arms is not up to standard have also put defense industry revenues in doubt.

The Russian arms industry - nurtured under Vladimir Putin's 2000-2008 presidency - has sold weapons to post-Soviet states and Cold War allies for decades on the strength of Soviet design and technology, which once rivaled that of the United States.

But the industry has largely stagnated because of a lack of funding since the collapse of the Soviet Union, leaving weapons manufacturers dependent on outdated designs.



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