Goa Shipyard Ltd. signs ₹500 mn tech transfer deal with Rosoboronexport.

India on Tuesday signed a $500 mn deal with Russia to locally manufacture two stealth frigates with technology transfer. The agreement was signed between Goa Shipyard Limited (GSL) and Rosoboronexport of Russia.

“The $500 mn deal is for material, design and specialists assistance from Russia for the two ships. Balance work will be done by GSL, and it will have a whole lot of Indian equipment including BrahMos missiles,” an official source said.

The cost of the engines for the ships which would come directly from Ukraine and the cost of constructing them at GSL are in addition. While the ships are built by Russia, the engines are supplied by Zorya Nashproekt of Ukraine. Four gas turbine engines, gear boxes and specialist support will cost around $50 mn per ship, the source stated.

Also Read Army zeroes in on Russian Igla-S missile

“Work on the two frigates will start in two years by mid-2020 and is expected to be completed by 2026- 2027,” the source added.

In October 2016, India and Russia signed an Inter-Governmental Agreement (IGA) for four Krivak or Talwar stealth frigates — two to be procured directly from Russia and two to be built by GSL. Of late, GSL has maintained a good track record. It has delivered 28 ships ahead of schedule in the last four years.

India recently signed a $1 bn deal with Russia for direct purchase of two frigates. The basic structures of the two frigates are already ready at Yantar shipyard in Russia and will be finished now.

After the Defence Acquisition Council (DAC) accorded approval for the deal, GSL was selected for the project in February 2017. Following this GSL completed the price negotiations with Russia as well as the Defence Ministry and the Indian Navy. The Cabinet Committee on Security (CCS) has already cleared the deal.

India had earlier procured six frigates weighing 4000 tonnes of the same class in two different batches, the Talwar class and the upgraded Teg class. The four ships to be built will weigh 300 tonnes more than the earlier ones and will be armed with BrahMos supersonic cruise missiles, Navy officials had said earlier.

On Monday, Russia was declared the lowest bidder in the Army’s Very Short Range Air Defence (VSHORAD) deal and last month India signed a $5.43 bn deal for five S-400 long range air defence regiments. The series of deals with Russia come in the backdrop of looming US sanctions under the Countering America's Adversaries Through Sanctions Act (CAATSA) law.