Editor's Note: The Russians are also trying to sell the Indians the new MiG-35 fighter in a run-off with the US, France, and Sweden. The Russian MiG-35 is an upagrade to the MiG-29 . The naval version of the Mig-29 is included in the sale of the Admiral Gorshkov cruiser.
The Russians are likely to win the contract with India because they have a 40 year history with the Indian Air force (IAF), their fighter is more current 4.5 generation than the competiion and costs about two-thirds of the comepetitor's aircraft at under $40 million per unit. Of course, it's not over until the Fat Lady sings. 
Admiral Gorshkov cruiser
Dmitry Medvedev’s visit to Russia’s Arkhangelsk Region will help solve the problem with the unfortunate Admiral Gorshkov cruiser. The history of the ship began during the times of the Soviet Union. The aircraft carrier was rusting in the White Sea for a long time after the break-up of the USSR. Now Russian ship-builders seem to be unable to remake the cruiser for the Indian Navy.
Russia’s major shipyard, Sevmash Enterprise, has been working on the ship for several years, to remake it into a mini cruiser for the Indian navy. The execution of the Indian order was pushed back from 2008 to 2012 due to the inaccurate evaluation of the production cost.
Originally, the contract was evaluated at $620 million. Afterwards, India was supposed to pay $1.5 billion taking account of an additional delivery of 16 deck-based MiG-29K jets. Nowadays, the cost of the project makes up $2.5 billion.
The cruiser was delivered to Sevmash Enterprise in the city of Severodvinsk at the end of the 1990s. The command of Russia’s Pacific Navy sold two similar vessels to China and Korea in 1994 for a very low price. The Chinese quickly made an entertainment complex from the Russian mini cruiser – the vessel still brings very good money in China.
India evinced interest in the Admiral Gorshkov in the year 2000. It was agreed in 2003 that Russia would give away the cruiser to India for free, whereas India in its turns would place an order with Russia to remake the cruise into an aircraft-carrier.
It later became known that the cost of the contract was considerably underestimated – that was probably the reason why India signed it so quickly.
President Medvedev strictly ordered to complete the project for India on time. Nikolai Kalistratov, the director of Sevmash Enterprise, explained it to the president that India originally “ordered a cheap car and wanted Russia to make a Mercedes out of it.”
Medvedev’s visit showed that the Admiral Gorshkov will never stay in Russia and that it will have to become “an expensive Mercedes” for India.
http://english.pravda.ru/russia/economics/09-07-2009/108031-admiral_gorshkov-0
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