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India–Russia FGFA Deal Hits a Bump

In 2007, India and Russia signed an inter-governmental agreement for a mega project consisting of joint-development of a fifth-generation fighter aircraft (FGFA).

India, however, recently has conveyed its unwillingness to Russia to move forward with the project due to the high costs involved.

Official sources from both sides are currently stating that negotiations and discussions haven’t been entirely shelved yet. India is ready to take a re-look at the co-development of the FGFA if an appropriate division of cost, an appropriate way of sharing the expenses, can be formulated between the two countries.

With the 2007 agreement, India and Russia had planned to take their military ties and their strategic partnership to the next level. However, the project has been stuck for the last 11 years due to serious differences occurring between the countries over one matter or the other. Primarily there have been disagreements on sharing cost of developing the jet, technologies to be used for it, and the number of aircrafts to be produced.

According to sources, the cost of the project has been pegged at around USD 30 billion.

“Our position on various aspects of the project, including the cost component, has been conveyed to the Russian side and there has been no resolution to the issues yet,” a top official involved in the negotiations with Russia said.

While India had agreed to pay USD 296 million earlier in December 2010 for the preliminary design; later both the sides expressed their desire to contribute USD 6 billion each towards the final design and production of the fighter jet for the first phase. However, both the countries were unable to reach a uniform conclusion.

India has been insistent to get equal rights over the technology that is to be used for the making of the aircraft, but Russia is reluctant to share all the critical technologies of the plane. While negotiating for the project, India had insisted that they must get all the required codes and access to critical technology for the FGFA, so that the country can upgrade the aircraft as per its requirements, sources said.

In February 2016, Russia and India had revived talks on the FGFA project after a clearance from then Union Minister of Defense Manohar Parrikar.

State-run Hindustan Aeronautics Ltd (HAL) is strongly pitching for the fifth-generation fighter jet project. HAL feels the multi-billion dollar project will provide India with a significant opportunity to encourage its aerospace sector. No other country except Russia has ever offered such critical technologies to India.

There have been constant indications from the Indian Air Force that it is not too keen to pursue the project with the stated high costs, unless a mid-way solution can be crafted