On March 16, 2020, Dmitry Shugaev, Director of the Federal Service for Military-Technical Cooperation with Foreign Countries (FS VTS), spoke with the Interfax Agency about details of Russian defence exports in 2019 and outlined prospects for the near future.
Shugaev confirmed that in 2019 Russia still ranks second directly after the USA in world arms sales, with the exact figures to be published at the forthcoming meeting of the Military Technical Cooperation Commission under the Russian President. The order backlog amounts to US$55 billion.
As usual, China, India and Egypt are Russia’s top contractors in 2019, with Turkey being a newcomer ranked on fifth place, mainly because of the S-400 long-range air defence system (ADS) regiment acquisition.
Aviation equipment accounts for 45% of Russian defence exports and air defence accounts for one third, with 15% going toward army equipment. The rest is for naval and other types of products. Shugaev mentioned that the U.S. imposed sanctions, the devaluation of the Ruble, and the COVID 19 crisis have all been influencing Russian defence sales but only to a limited degree. A sizable component of Russian sales shifted from US$ to national currencies, in particular the Ruble.
China and India
Coming back to Russia’s main customers, Shugaev noted that Russia will complete the contract with China on the S-400 ADS, with the final batch of the missiles delivered later this year. He also mentioned an extensive programme for the supply of aircraft engines and the possibilities to increase the supply of Su-35 multi-purpose combat aircraft.
The contract for S-400 is one of the largest contracts ever signed with India. The first batch is to be delivered by the end of 2021. The entire contract is to be concluded by the end of 2024, Shugaev said. He remarked that the Indian side did not insist on local content for this air defence system, but only wanted to receive this up-to-date equipment as soon as possible. Other promising contracts with India, according to Shugaev, include the licensed production of new generation AK-203 Kalashnikov machine guns, the supply and licensed production of IGLA-S MANPADs and an additional batch of T-90S main battle tank (MBT) supplies with licensed production of over 400 MBTs. “Russia has consistently followed the ‘Make in India’ programme even before it was officially announced,” said Shugaev.
He also said that Russia will participate in the new tenders for 110 medium-range fighters with the MiG-29UPG, for submarines with air independent propulsion system and for naval helicopters with the naval version Ka-226.
Shugaev was confident that participation in another tender for 12 demining vessels under the ALEXANDRITE E project will lead to good results due to the good records of the frigates of project 11356 delivered earlier.
With regard to Turkey, he said that the additional supply of S-400 systems to Turkey remains an option that needs to be addressed “in the near future”. According to Shugaev, this option requires “a certain involvement of the Turkish side in the production process.” He declined to receive further details on this part of the agreement, but said it would not harm Russia’s national security, as all related issues had been carefully examined to make bilateral cooperation mutually beneficial.
He added that the implementation of S-400 in Turkey’s national air defence and the use of the system for combat operations is the sole responsibility of Turkey, as the material supply and personnel training have been completed.
Finally, Shugaev mentioned that negotiations on a possible contract for Su-35 multi-role combat aircraft had been “not too active.” In his opinion, Turkey should make a political decision whether to accept the Su-35 or not. “So far we have not received any request for this aircraft from Turkey,” Shugaev said.
He briefly touched on several other issues. He mentioned that any cooperation with Iran would only take place within the framework of the relevant UN Security Council resolution. The Islamic Republic is interested in a wide range of defence equipment produced in Russia, but practical cooperation could become a reality once the UN Security Council restrictions are lifted. The sanctions expire in October 2020 and the situation should be resolved by then.
Apart from S-400, Pantsir SHORAD remains one of Russia’s top sellers due to its outstanding performance during the Syrian conflict. The system has recently gained Serbia as a new customer and 13 other countries from the Middle East, South East Asia, Latin America and Africa are actively negotiating for it, according to Shugaev. He also mentioned that after the Russia-Africa summit in Sochi, Russia’s defence export portfolio received around US$1 billion in orders from the black continent.
Within the aerospace business, the Su-30 family of multi-role aircraft remains a top seller. The contracted lots have been delivered to Belarus (together with Yak-130 advanced trainers) and Armenia, while deliveries to Myanmar will be handled according to the terms of the contract between 2021 and 2022.
Military technical cooperation with Venezuela is well underway, Shugaev said. He also mentioned that despite the difficult situation, the country is meeting all its commitments. Most of the cooperation will continue as after-sales support with a new service centre for Mi family helicopters, which will be put into operation later this year. The contract for the licensed production of AK-103 machine guns and ammunition is also on its way.
Shugaev paid special attention to various after-sales programmes not only in Venezuela. The new service centres are to be established within the member states of the CIS and UTCS. The service network was expanded in Vietnam, India and China. Negotiations on new workshops, stationary and mobile service centres in Africa and Latin America are well under way.
At the end of his talks, the head of FS VTS was confident that all current obstacles, including U.S. sanctions and COVID 19, could be successfully overcome.