India and Russia Tuesday sealed a USD 500 million deal for construction of two missile frigates in Goa for the Indian Navy, sending a clear signal of continuing with high-level defence collaborations notwithstanding the US warnings of sanctions. Officials said the agreement for manufacturing of the two Talvar-class warships was signed between defence PSU Goa Shipyard Ltd (GSL) and Russia’s state-run defence major Rosoboronexport under the government-to-government framework for defence cooperation.

Under the deal, Russia will provide design, technology know how and key materials to GSL for construction of the ships in India. The ships will be fitted with most advanced missiles and other weapon systems, they said. “We have finalised a USD 500 million deal with Russia for construction of two warships in Goa,” CMD of GSL Shekhar Mital told PTI. He said construction of the ships will begin in 2020 and the first one will be ready for induction in 2026 while second one will be ready by 2027.

The two sides already finalised another deal amounting to around USD 1 billion under which Russia will supply two frigates to India by 2023. Tuesday’s agreement came nearly six weeks after India signed an agreement with Russia to buy a batch of S-400 air defence missile systems at a cost of around USD 5 billion. India is going ahead with mega defence deals with Russia disregarding warnings by the US of sanctions. The Trump administration has put several Russian firms under sanctions under Countering America’s Adversaries Through Sanctions Act (CAATSA).

The US said countries engaged with Russia’s defence firms may also face actions under CAATSA. India has been hoping to get a waiver from the US on the deals it was signing with Russia. Russia has been India’s largest defence supplier. The defence and security cooperation has been on an upswing between the two countries in the last few years. Yesterday, Russian defence major Rosoboronexport emerged as the lowest bidder in the Indian Army’s tender for procurement of a batch of short-range air defence missile systems, official sources said Monday. The other contenders for the deal were Swedish firm SAAB and French military firm MBDA. The size of the contract is likely to be around USD 3 billion.