The two countries also signed agreements for the long-awaited sale to India of a refitted Soviet-era aircraft carrier as well as 29 MiG fighter jets, further cementing Moscow’s role as New Delhi’s principal arms provider.

While welcoming the deals, Putin stressed that the two old Cold War allies still had some way to go to realise the full potential of their partnership.

“The level of our capabilities has not been reached,” he said following talks with Indian Premier Manmohan Singh.

Russian Deputy Prime Minister Sergei Ivanov said the reactor agreement covered the construction of “up to 16 nuclear energy units” at three Indian sites.

Earlier, Sergei Kiriyenko, the head of Russia’s state atomic agency said six of the reactors would be built by 2017.

Russia is already building two nuclear power units in the southern Indian state of Tamil Nadu.

The accord on the aircraft carrier, the Admiral Gorshkov, marks the end of a lengthy purchase process that was marred by a series of price disputes and delayed deliveries.

Ivanov said the ship would be delivered by the end of 2012. The final cost was not revealed, although experts believe it to be around 2.3 billion dollars.

Russia supplies 70 percent of India’s military hardware but in recent years New Delhi has looked to other suppliers including Israel and the United States.

Mikhail Pogosyan, the general director of Russian plane maker RAC-MiG estimated the value of the MiG-29K fighter deal at around 1.5 billion dollars.

Energy cooperation is fast emerging as a focus between oil and gas-rich Russia and energy-starved India, always on the lookout for new fuel sources to power its growing economy.

“This is one of our most important and promising areas of cooperation,” said Putin, who acknowledged growing competition to provide nuclear energy to India after it sealed a landmark deal with the United States in 2008.

The accord allowed India access to civilian nuclear energy despite its refusal to sign the Non-Proliferation Treaty.

The strong ties between Moscow and New Delhi date back to the 1950s after the death of Stalin. But India has in recent years also taken care to balance this friendship by fostering closer relations with Washington.

In a live webcast interaction with Indian businessmen, Putin said it was time for the old Cold War allies to boost trade beyond the limited scope of defence.

At just over 7.5 billion dollars in 2009, bilateral trade turnover is miniscule and the two countries aim to lift it to 20 billion dollars by 2015.

“There is the political will on both sides, but we need support from the captains of industry,” Putin said. “We should think about the future,” he added, stressing the need for commercial ties to move beyond arms sales.

“Cooperation in hi-tech is the priority for us,” Putin said. “The Russian government is ready to directly support this activity, with the help of additional financial assistance, if need be.”

On security issues, Putin highlighted the presence of militant outfits operating along the Afghanistan-Pakistan border, saying they were cause for concern not just to Russia and India but the entire region.

However, he also noted that Pakistan had made efforts to crack down on “banned groups” in the area.

“We hope addressing the problem will be in the best interests of Pakistan. We need to support those efforts,” Putin said.

Ever since the 2008 Mumbai attacks, India has been pressing Pakistan to crack down on militancy, especially those groups blamed for assaults on Indian soil. – AFP