After almost nine years of negotiations the initial USD 1.5 billion contract for retrofitting the aircraft carrier and buying 16 MiG-29K, K/UB deck-based fighters was signed in 2004.
In 1998, to break the deadlock, the government of then Prime Minister Yevgeny Primakov had offered the aircraft carrier, currently moored in a White Sea naval base in northern Russia for free to India, provided New Delhi paid for its repairs and modernisation.
However, lack of due diligence at the time of initial assessment of work led to whopping cost escalation that stalled its repairs and modernisation.
The aircraft carrier deal had become a major irritant in bilateral relations between India and Russia. By the end of 2007, when it became clear that Russia will not deliver the radically redesigned vessel by 2008 deadline, the relations dipped to an all-time low.
However, the two countries inked an additional agreement under which India agreed to pay a higher price for its refit.
Indian officials have conceded that even with the cost escalation, it was a good deal, since a similar vessel would cost not less than double the price in the international market, but nobody makes aircraft carriers for export.
