Putin Visits India in Race With U.S. for Arms, Nuclear Deals

March 11 (Bloomberg) — Russian Prime Minister Vladimir Putin arrives in New Delhi tonight to fend off competition from the U.S. and Europe to supply arms and nuclear energy to India.

Putin is set to meet his Indian counterpart Manmohan Singh tomorrow to oversee the signing of more than $10 billion in deals, including a refurbished aircraft carrier, MiG-29 fighter jets and two nuclear reactors.

The Kremlin is counting on Cold War-era ties to keep India as its largest arms customer and a future partner in the nuclear industry. India’s improved ties with the U.S., crowned by a landmark nuclear deal, have emboldened the world’s second- fastest growing major economy to look further afield for weapons and energy sources.

“The competition to cooperate with India in defense and nuclear energy is stepping up,” said Fyodor Lukyanov, editor- in-chief of Russia in Global Affairs magazine. “India isn’t Venezuela or Iran, but a country respected by all, without any political limitations.”

India has tripled its defense budget over the last decade as it looks beyond a traditional military rivalry with Pakistan to counter China’s rising power. U.S., Israeli and European arms makers are encroaching on a market once dominated by the Soviet Union.

The Indian nuclear industry has likewise attracted foreign interest following the 2005 agreement with the U.S. that attached International Atomic Energy Agency safeguards to the South Asian country’s civilian nuclear facilities.

Gorshkov Carrier

“Putin’s visit serves to maintain high-level contacts between India and Russia and to address some unresolved issues, particularly on defense contracts,” said C. Uday Bhaskar, director of New Delhi-based National Maritime Foundation, a security and strategic research organization.

The biggest thorn in ties is Russia’s overhaul of the Admiral Gorshkov aircraft carrier, which has been beset by delays and cost overruns. President Dmitry Medvedev scolded shipbuilder OAO Sevmash in July, saying there would be “grave consequences” if delivery of the Soviet-made vessel was pushed back any further. The target date is now 2012.

An additional contract on the carrier will be signed during the visit, Putin’s deputy chief of staff Yury Ushakov told reporters in Moscow yesterday. A deal on the purchase of 29 MiG- 29 fighter jets to augment the 28 already ordered is also expected, he said.

Nuclear Reactors

The two countries will sign an agreement on increasing capacity at the Kudankulam nuclear power plant in southern Tamil Nadu state, where reactors are already under construction, according to Ushakov. Russia and India signed a nuclear-energy cooperation agreement when Singh visited Moscow in December.

Putin, who traveled to India four times during his eight- year presidency, will be making his first visit as prime minister. He’ll be accompanied by a delegation of defense contractors, chemical industry executives and government ministers.

Trade between the two nations totaled $7.5 billion last year, according to Russia’s Federal Customs Service. Russia aims to increase that figure to $20 billion in the next five years, according to Ushakov.

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