NEW DELHI — India has awarded a $3.12 billion contract for local production of 464 T-90S main battle tanks after paying a technology transfer fee to Russia.

The contract was signed with little fanfare earlier this month. The deal stipulates that Russian original equipment manufacturer UralVagonZavod and arms export agency Rosoboronexport will be paid $1.2 billion for technology transfer, while India’s state-owned Ordnance Factory Board will be paid $1.92 billion for local production of 464 T-90S tanks, according to an Indian Ministry of Defence official.

India will pay the Russian defence companies in roubles, Russia’s currency reported US based A senior OFB executive said complete localisation of T-90S tanks in India is impossible, as a large number of parts must continue to be imported. The parts that will be locally produced include panoramic night sights, thermal imaging fire-control systems and explosive reactive armour, he added. However, the engines and transmission system that makes up 45 percent of the cost of a T-90S tank will come from Russia the report further added.

India and Russia had earlier signed a deal worth $1.237 billion for the additional supply of 347 T-90S main battle tanks (MBT).

Part of these tanks will be assembled at Avadi Factory in Tamil Nadu from the kits to be supplied by Uralvagonzavod tank plant situated in Nizhny Tagil in the Urals, according to state-run Radio Mayak.

India currently has 310 T-90S MBTs of which 181 were assembled by the Heavy Vehicles Factory in Avadi from the kits imported from Russia.

Under the Transfer of Technology (ToT) and licensed production deal inked in November 2006 India will indigenously produce 1,000 MBTs.