India on Thursday sealed a $3 billion deal with Russia for the leasing of a nuclear-powered attack submarine for the Indian Navy for a period of 10 years, military sources said.
The two countries signed an inter-governmental agreement capping months of negotiations on price and various other aspects of the deal.
Under the pact, Russia will have to deliver the Akula class submarine, to be known as Chakra III, to the Indian Navy by 2025.
It will be the third Russian submarine to be leased to the Indian Navy.
A spokesperson in the Defence Ministry refused to comment when asked about the deal.
India has been significantly bolstering its naval prowess in the backdrop of China’s attempts to expand its influence in the Indian Ocean region.
India Navy has taken two more submarines from Russia on lease.
The first Russian nuclear-powered submarine — christened INS Chakra — was taken in 1988 under a three-year lease. A second INS Chakra was taken on lease in 2012 for a period of 10 years.
The lease of Chakra II will expire in 2022 and India is looking at extending the lease, sources said.
The deal for the Chakra III came days after Indo-Russian joint production facility to manufacture AK-203 assault rifles for the Indian Army was inaugurated by Prime Minister Narendra Modi in Uttar Pradesh’s Amethi.
In October, India signed a multi-billion dollar deal with Russia to procure a batch of S-400 air defence missile system, brushing aside the threat of American sanctions.
Read | India ignores US threat, inks $5 billion S-400 missile deal with Russia
Under the more than $5 billion deal, Russia will supply five regiments of the highly-sophisticated missiles to India. These missiles will provide India umbrella coverage against any air-borne threats like fighter jets, missiles and UAVs.
The S-400 missile system, manufactured by Almaz-Antey, is capable of tracking and destroying hostile strategic bombers, jets, missiles and drones at a range of 380 km.
The Russian missile system is said to be the best in the world.
(With PTI inputs)