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. Last Updated: 07/27/2016

Airplanes, $1Bln Debt Top India Visit

President Vladimir Putin and Indian Prime Minister Manmohan Singh agreed Monday to boost ties, praising a budding alliance among Russia, India and China and giving their blessing to an agreement for the joint development of a military transport plane, among other deals.

"We agreed that there are enormous opportunities for cooperation," Singh said at a joint news conference after his talks with Putin.

"We have an obligation to explore the idea of convergence between three of us," he said, including China in the equation.

Singh was in Moscow for a one-day summit, an annual event since 2000.

The leaders oversaw the signing of documents including an agreement to produce jointly a military transport aircraft -- a plan that has been in the works for several years. That deal followed an earlier agreement on the production of a fifth-generation fighter jet.

Putin said the deals would "open up new opportunities for scientific and industrial cooperation in very sensitive spheres."

About $300 million of the money to finance the transport-plane project will come from $1.1 billion of Indian debt to Moscow, owed since the Soviet period, a Finance Ministry spokesman said, declining to be identified. The balance of the debt is expected to be diverted into other investment projects.

At the Kremlin, Putin and Singh also agreed to consider taking the countries' partnership in the energy sphere beyond work on the Sakhalin-1 oil and gas field to explore joint projects in Russia, India and third countries. India's ONGC Videsh holds a 20 percent stake in Sakhalin-1.

In the run-up to the summit, Russia and India agreed to establish three centers for research in the fields of nonferrous metals and biomedical and laser technology, Putin said.

The two nations also agreed Monday to work together on lunar exploration.

"Russia and India will be creating a joint space vehicle," Federal Space Agency head Anatoly Perminov said in a statement. "Delivery to the moon of a complete research laboratory is planned as part of the project," he said.

Singh said India was hoping for deeper cooperation from Russia in developing its nuclear energy industry and thanked Moscow for its support in its bid to get nuclear restrictions lifted.

Russia is building two nuclear reactors at Kudankulam in the state of Tamil Nadu. Despite expectations, an agreement to build four more was not signed by the two leaders this trip. Putin had overseen the signing of a memorandum of intent for the reactors during a January trip to New Delhi.

Federal Atomic Energy Agency chief Sergei Kiriyenko told reporters that the text of the agreement was ready and work was ongoing.

The lack of an agreement on outstanding Soviet-era debt has contributed to a "certain standstill" in Russian investment in India, Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs, a big business lobby group, said on the sidelines of the ceremony. The two countries managed only an anemic $4 billion in trade with each other in 2006.

On the brighter side, the talks did indicate that Russian MiG-35 jets stood a chance of winning an Indian tender, said Mikhail Zavaly, director for special assignments at Rosoboronexport.

"We've submitted our proposals," said Zavaly, adding that a contract for 126 fighter jets would be worth around $10 billion.

Tatyana Shaumyan, head of the Center of Indian Research at the Russian Academy of Sciences' Institute of Oriental Studies, who was at a dinner with Putin and Singh later, praised the meeting as a "breakthrough of sorts."

She pointed to the fact that the talks lasted an hour longer than scheduled and involved ambitious projects like lunar exploration.

"I have a feeling it was not merely a protocol meeting," Shaumyan said.