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India, Russia finalise USD 500 million deal for construction of 2 warships for Indian Navy

India and Russia closed an agreement for USD 500 million on Tuesday for the construction of two missile frigates in Goa for the Indian Navy, which sends a clear signal to continue with high-level defence collaborations, despite the warnings of US sanctions.

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Officials said the agreement for the manufacture of the two warships of the Talvar class was signed between the PSU defence Goa Shipyard Ltd (GSL) and the state defence commander of Russia, Rosoboronexport, in the framework of government to the government for defence cooperation.

Under the agreement, Russia will provide GSL with design, technological know-how and key materials for the construction of ships in India. The ships will be equipped with the most advanced missiles and other weapons systems, they said.

"We have finalized a USD 500 million agreement with Russia for the construction of two warships in Goa," GSL Shekhar Mital's CMD told PTI.

He said that the construction of the ships will begin in 2020 and the first will be ready for induction in 2026, while the second will be ready for 2027.

The two parties have already finalized another agreement for an amount of around USD 1,000 million under which Russia will supply two frigates to India by 2023.

Tuesday's agreement came almost six weeks after India signed an agreement with Russia to buy a batch of S-400 air defence missile systems at a cost of around USD 5 billion.

India goes ahead with the mega defence agreements with Russia, without taking into account the warnings of US sanctions. The Trump administration has put several Russian companies under sanctions under the Counter-Statute of the United States' adversaries through sanctions (CAATSA).

The United States said that countries committed to Russia's defence firms could also face actions under CAATSA. India has been waiting to obtain a US exemption. About the agreements, he was signing with Russia.

Russia has been the largest defence provider in India. Defence and security cooperation has been on the rise between the two countries in recent years.

Yesterday, the Russian defence commander Rosoboronexport emerged as the highest bidder in the bidding of the Indian army for the acquisition of a batch of short-range air defence missile systems, official sources said on Monday.

The other contenders for the agreement were the Swedish firm SAAB and the French military firm MBDA. It is likely that the contract size will be around USD 3 billion.

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