By IOL South Asia Correspondent

New Delhi, December 3 (Islam Online) - Russian President Vladimir Putin arrived in the Indian capital New Delhi Tuesday, December 3, from Beijing for discussions largely focusing on terrorism and security.

Earlier this week, Putin set the tone for his talks with Indian leaders by making unusually strong remarks against Pakistan as an alleged hotbed of terrorism.

India was pleased so much so that Prime Minister Vajpayee lapped it up but Islamabad reacted very strongly to the remarks.

Indian officials from Prime Minister Atal Behari Vajpayee to Foreign Secretary Kanwal Sibal are quoting Putin to prove their allegation about Pakistan being a refuge for terrorists and that its nuclear arsenal may fall in the hands of extremists.

India and China are the largest buyers of Russian arms, which props up the faltering Russian economy.

However, mutual trade other than arms is extremely meager - about $1.4 billion last year.

Russia would like this situation to change, but private sector investors and big businesses are wary because of Soviet era obstructionist practices and an unhelpful business environment.

For the once mighty Russia, it is not easy to swallow the loss of its 14 "republics" and dodge expansion of NATO to the areas which once constitute the Soviet Union.

In a desperate bid to retain its old clout, Russia has been proposing (intermittently) an axis of three big regional powers - India, China and Russia.

However, India's bid to develop close relationship with the U.S. and China's Most Favored Nation status with the U.S. may not facilitate the axis formation.

India still considered China as its main enemy.

Even Russia has meekly agreed to become America's junior partner, which does not have to be consulted on anything.

In reality, the "axis" may not see the light of the day because of the rivalry between India and China.

However, according to officials, Putin’s talk with Indian leaders would focus on this aspect as well.

Russia has steadily supported India on Jammu & Kashmir and helped India with technology and arms denied by western countries.

During the last military build-up on Indo-Pakistan Line of Control (LoC), Russia sent in much needed military hardware spares.

Negotiations for purchase of a second-hand Russian aircraft carrier, Admiral Gorshakov, are under way.

According to reports, it would be a $2 billion deal and Russia may lease a couple of nuclear submarines with the aircraft career deal.

Earlier estimates of refitting the "free gift" rusting aircraft carrier (Admiral Gorshkov) were in the range of $500 million.

Indians complained that the Russians are overcharging for the "free gift" under the guise of refitting.

Russian Minister for Industry, Science and Technology Ilya Klebanov was already in Delhi. He is joint chairman of the Indo-Russian military-technology committee.

He met Defense Minister George Fernandes this morning to push through several major arms deals.

Of late there has been a dip in Russian arms exports to India, as New Delhi looks for Israeli and American substitutes.

Russia's need for Indian arms contracts and India's dependence on comparatively cheap Russian weaponry is driving the relationship between the two countries.

Russia's arms exports have fallen from over $23 billion per year in the late 1980s, to barely $3 billion per year.

And almost a third of this is in arms sales to India, that imports more than 70 per cent of its foreign arms from Russia.

After wrapping up multi billion dollar deals for the supply of Sukhoi-30 fighters and Talwar class destroyers, Russia is now lobbying hard for fresh deals worth up to another eight billion dollars.

This includes Admiral Gorshkov and two squadrons of MiG-29 fighters that could be worth another four billion.

Three TU-22 long-range bombers never sold to another country are enormously expensive and MiG trainer aircraft instead of the Hawk trainers that India is negotiating with Britain - are a deal worth more than a billion dollars.

Experts say these contracts are essential for the survival of Russia's arms producers that bring in much-needed hard currency for the cash strapped Russian economy.