quinta-feira, 21 de fevereiro de 2008

The Gorshkov Guessing Game

The Gorshkov Guessing Game

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It is anyones guess what will happen, but I continue to get the impression Russia is looking for a reason to keep the Gorshkov.

A source in the Russian military establishment confirms to that Russia and India currently are trying to re-negotiate an agreement from 2004, according to which India was to take over the vessel after an upgrade process in 2008.

The two countries might however not be able to agree about the issue. According to the defence source, Russian authorities demand that India pay about one billion USD extra for the vessel. India on the other hand demands the takeover of the vessel as agreed upon in 2004.

Should the parts fail to agree, Russia is likely to return the aircraft carrier to its Navy.

The negotiations are going to be difficult, because India and Russia both have leverage. India can choose to tie it to any number of other purchases, from civilian nuclear power to the multi-role aircraft purchase that has everyones attention. I believe the US will be an indirect factor in the outcome. I also still think the Kitty Hawk is in play.

Bloomberg has a good article on US soft power and its influence in India. India has a chance to leverage the US in its Russia negotiations, and could score with that card. Russia and India are about 600 million apart on the negotiation price for the Gorshkov. That is a lot of money, for $600 million the Kitty Hawk can be ready to go much sooner than the 4 years Russia is offering the Gorshkov, and with F/A-18s in the multi-fighter deal, India would have a capability well beyond what Russia is offering for a many years into the future.

I get the impression Russia is resigned to the fact they are slowly losing India to competitors in military sales. After having already lost China, this will require Russia to take a closer look at their own needs, and to either find new markets or cut deals to maintain India as a market. The second part might not be possible. In a perfect world, Russia would find something besides military equipment to export. It could be the market pushes this reality sooner rather than later. One can hope.

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