Procurement: Russia Raises the Rates

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October 18, 2007: India has agreed to pay Russia a higher annual increase (to account for inflation and the fluctuating value of other currencies) for weapons. The old rate was 2.8 percent a year, while the new one is five percent. Russia had been withholding deliveries until an agreement was reached. Thus the new shipment of Su-30 kits (the aircraft are shipped in pieces, for assembly in India) will cost $40 million each, for 40 aircraft. This will give the Indians a total of 230 Su-30s (roughly equivalent to the U.S. F-15C) by 2010. Overall, the average price of each of those aircraft has been closer to $25 million each. That's a bit less than half the cost of an F-15C, and that price break is the major reason the Indians keep buying Russian warplanes.

 


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