Russian Defence Industries have been crippled by the recent financial meltdown making it difficult for them to fulfill state orders for new weapons, which could be an alarming development for India leading to further delays in delivery of strategic armament systems.
The country's Deputy Prime Minister Sergei Ivanov has said that many defence plants have suffered a dire cash shortage and the situation could become "more painful" in the near future.
Hit by the credit crunch, the Russian Military Industrial Complex (MIC) could further delay the Indian defence orders, including the upgradation of Kiev class Admiral Gorshkov aircraft carrier and completion of three Talwar class stealth frigates under construction at a shipyard in Russia's Baltic enclave of Kaliningrad.
Ivanov, who looks after the MIC in the cabinet of Prime Minister Vladimir Putin, today sought urgent bailout package from the government in order to execute defence orders and ensure proper functioning of the organisation, which is yet to recover from the fragmentation of Soviet Union.
At the meeting here today of the inter-departmental commission on backing strategic defence enterprises, Ivanov demanded that the state-owned commercial banks - Sberbank, VTB and VEB should extend credit lines to the MIC working on defence contracts.