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Negotiations on lease of Russian nuclear submarine deadlocked over price issues

Negotiations for the acquisition of an Akula-class nuclear-powered attack submarine (SSN) from Russia are currently dead locked on price issues.

This is one of the reasons an agreement could not be concluded before the October 5 summit meeting between President Putin and Prime Minister Narendra Modi in New Delhi.

Sources said that the Russian side was asking for a price of over $2.5 billion for a five-year refit and refurbishment of a Russian navy Akula-class SSN.

The last round of talks between a Russian delegation and the Indian Navy between September 24 and 28 in New Delhi, failed to resolve the price deadlock. The negotiations are being steered by the National Security Adviser Ajit Doval's office.

The Akula-class SSN dubbed the 'Chakra-3' to replace the INS Chakra whose ten year lease from Russia runs out in 2022. India paid for an estimated $1 billion refit and lease of this submarine which was completed in 2008 and handed over to the navy in 2011. One of the reasons for the current deadlock is the Russian side asking over double the cost of the earlier lease.

The submarine is part of a $10 billion arms package, including helicopters, frigates and an assault rifle production line that India is negotiating with Russia.

India and Russia inked a $5 billion agreement for five S-400 air defence missile systems on October 5. The missiles are to be delivered in the next two years.

The Chakra was only recently returned to service after a 2017 accident.

India first leased an SSN, also called the Chakra from the former Soviet Union on a three-year lease between 1987 and 1991.

The Russian submarines are being leased to train crews for India's fleet of ballistic missile firing submarines (SSBNs) India's first indigenously built SSBN, the INS Arihant entered service in 2016.

A second, the INS Arighat was launched in 2017 and is expected to enter service soon. Two more SSBNs are under construction at the Shipbuilding Centre in Vizag.

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