Updated on Friday, December 05, 2008, 00:00 IST

New Delhi, Dec 05: In a boost to the sagging defence relationship between India and Russia, the two nations on Friday signed a contract for supply of 80 MI-17V-5 medium lift helicopters for the Indian Air Force (IAF).

Valued at USD one billion, the agreement between the two sides comes at a time when New Delhi and Moscow are squabbling over several defence related deals signed earlier such as the escalating costs of Admiral Gorshkov aircraft carrier refit and the technology transfer for the T-90 tanks.

However, they agreed to move ahead and resolve all contentious issues in military cooperation, including the Russian demand for additional USD 2 billion dollars for the repair and refit of Admiral Gorshkov aircraft carrier and the sharing of technical knowhow for the T-90s.

The MI-17 deal had been clinched just before Russian President Dmitriy Medvedev's state visit here during a meeting of the High Level Monitoring Committee headed by Defence Secretary Vijay Singh and Russian Federal Service for Military Technical Cooperation Director Mikhail Dmitriev here on Tuesday.

The Cabinet Committee on Security too had given its go-ahead to acquisition of the helicopters at its meeting on Wednesday.

The helicopter contract was signed here by Defence Ministry's Director General (Acquisitions) Sashi Kant Sharma and Rosoboronexport Director General A P Isaykin after the officials talks between Prime Minister Manmohan Singh and Medvedev.

Bureau Report