According to contracts signed under the agreement, Russia will receive $250 million for the first set of engines. Experts say the project could bring Russia more than $700 million in revenue, considering the capacity of the market.
The Indian Air Force will acquire the new and highly reliable HJT-36 trainers for basic flight training and the right to manufacture such planes for third parties.
Director of the Federal Service for Military and Technical Cooperation Alexander Denisov said the signing of the agreement was part of a tender on the development of an engine for the Indian HJT-36 trainer.
He said re-sale of the aircraft to third parties was one of the main obstacles in the negotiation process, although the sides eventually found a mutually beneficial solution.
"The agreement guarantees that the implementation of the project will be monitored by state executive bodies," Denisov said.
At the same time, the agreement provides the legal basis for a contract between Rosoboronexport, the Russian state exporter of armaments, and India's HAL corporation, which will be directly responsible for implementing the agreements. The parties signed the contract on August 16, 2005 in the presence of the Russian president.