Russia open to working with both public and private sector companies in the defence sector: Anantoly Punchuk, Deputy Director FSMTC

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Updated: February 19, 2019 4:37:26 PM

The defense export volumes to India accumulated in the past 5 years by the end of 2018 exceeded $12 billion.

Prime Minister Narendra Modi, BrahMos JV, Kalashnikov project, IGA, Kalashnikov project, Amur-1650The defense export volumes to India accumulated in the past 5 years by the end of 2018 exceeded billion.

India and Russia have been long-standing defense partners and are now seeking ways of further deepening the ties and have decided to “upgrade and intensify” defense cooperation through joint manufacture, co-production and co-development of key military hardware and equipment. Last December, the two countries had a meeting of the Indian-Russian Intergovernmental Commission on Military-Technical cooperation which was close on the heels of the annual summit in New Delhi in October.

According to the joint statement released at the end of talks between Prime Minister Narendra Modi and the Russian President Vladmir Putin, “the roadmap for Military Cooperation has paved way for greater interaction between the militaries of both countries, including in training, exchange of senior functionaries of the militaries, Staff talks and Exercises.”

Ahead of Aero-India 2019, Anantoly Punchuk, Deputy Director FSMTC (Federal Service for Military Technical Cooperation of the Russian Federation is the agency responsible for defence exports) talks to Financial Express Online’s Huma Siddiqui. Excerpts:

How is the progress in the Rupee-Ruble transactions?

Today, we are facing a situation when our transactions with partners in dollars are no longer possible in the field of military-technical cooperation. Since US dollar is no more the universally applicable currency in defense contracts, we will have to look into the opportunities of using national currencies for transactions. Steps are being taken with India and some other partners who have strong currencies and good volumes of bilateral trade with Russia. The need to shift to transactions in national currencies is an established fact. This pattern is being, step-by- step and rather successfully, implemented with our major defense partners, and India is no exclusion.

However, it is just one of the instruments that we are planning to use in future. There is a whole array of mutually acceptable means at our disposal. What matters is our ability to negotiate options and cooperate with partners for our common benefit.

What is status of the Project 75I?

As we know, India is going to announce a tender under strategic partnership model. Russia is offering its state-of-the-art “Lada” class diesel-electric submarine which is the export modification of Amur-1650. It will be a submarine with an air-independent power plant that can be equipped with BrahMos missile.

We are ready for the tender which is expected in 2019. Surely, the fruitful experience that we share with India in the field of submarine construction is giving us an implicit advantage to successfully execute project 75I submarines production in India.

Is it true that BrahMos Missile export is stuck? Is Russia putting hurdles to it?

Since, the joint Indo-Russian venture was established back in 1998 BrahMos has been successfully producing and testing missiles. This venture is a real “precious gem” in our defense cooperation with India. BrahMos missile complexes are supplied to the Indian Army and manufactured in series. The Joint Venture (JV) is also testing new types of missiles, namely airborne-based, underwater deployment, missiles with increase range, hypersonic experimental as well as supersonic all-purpose missile. And this success is equally shared by both India and Russia.

Like India, Russia hopes that the BrahMos JV builds up its success which at a certain stage can hardly be possible without exporting its products to third countries. The BrahMos missile, indeed, has a good export capacity. Under the IGA signed in 1998 the issue of exporting to a third country is decided jointly by Russia and India when there is a request from a specific country and after passing the necessary intergovernmental procedures in both countries.

BrahMos is in talks with some countries, so let us wait.

What is the status of strategic partnership program with India? Is it an obstacle? Are there problems in implementing the model?

Russia retains its role of a major player in the Indian defense market. The defense export volumes to India accumulated in the past 5 years by the end of 2018 exceeded $12 billion.

Our defense cooperation has developed for around six decades and is a backbone of the privileged strategic partnership between Moscow and New Delhi. Defense cooperation between India and Russia is multi-faceted; it stretches from military aviation to tank production and shipbuilding. It goes far beyond supply contracts. We have developed technology transfer and joint production long before “Make-in-India” became a widespread defense procurement model. Graphic examples galore starting from Su-30MKI license production, T-90S tanks production to more recent joint ventures such as BrahMos, Ka-226T or the Kalashnikov project which is to materialize soon.

We are ready to share our sensitive technologies with India like with no other partner. For instance, imagine how the 1356 frigates built in the Indian shipyard, or potential cooperation for 75I with AIP could boost the local industry and advance indigenous technology.

I would take issue with you on the fact that Russia and India have problems in strategic partnership. This is totally untrue. Of course, some things need to be reviewed. We still have a lot to be improved in servicing our defense equipment especially in terms of involving Indian private companies on a larger scale. But on the other hand, the Indian private companies, even the biggest ones, do not have tangible experience in producing or repairing high-tech defense platforms such as planes, anti-missile defense systems, ships and submarines, tanks and armored equipment.

In India all the above mentioned defense equipment is produced by state-owned companies. And even if we take the agreements on Ka-226T, 11356 frigates or the discussed Kalashnikov project – in all these cases the Indian Ministry of Defence (MoD) itself chose a state-run company for their execution.

At the same time strategic partnership with private companies is the direction we are ready to take together with India. It can open new prospects to our defense cooperation, namely, in the field of spare parts and components production.

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