India’s Ministry of Defence (MoD) appears, for now, to have resolved the financial deadlock with sanction-hit Russia over providing bank guarantees for one of its significant naval programmes.

Industry sources said the Indian government had agreed, ahead of Prime Minister Narendra Modi’s visit to St Petersburg for an economic summit in early June, to waive the mandatory bank guarantee for the mid-life upgrade (MLU) of an Indian Navy (IN) diesel-electric Kilo-class submarine.

Instead, New Delhi will accept a sovereign guarantee from the Russian government for INS Sindhukesari ’s INR10 billion (USD156.25 million) MLU at the Zvezdochka shipyard in Severodvinsk in northern Russia.