Thread by @RALee85

Thread: in an interview with Kommersant, FSVTS Director, Dmitry Shugaev, confirms that Russian exported $15 billion worth of arms last year (involving 50 countries), and that its arms export portfolio is $55 billion (the same figure he gave in November).
kommersant.ru/doc/3874641

Not surprisingly, he emphasized the demand for Russian weapons that had been tested in Syria, like the Kornet ATGM (though the alleged boon to Russian arms sales from Syria never really materialized). He said he was a little concerned about the few orders for naval products. 2/

He said that Russia would try to move beyond the buyer-seller relationship by emphasizing technology transfer or localized production arrangements (like the Project 11356 frigate deal with Goa Shipyards in India) to increase the share of naval equipment in Russia's portfolio. 3/

As always, he said that Russia's arms trade would persevere despite Western sanctions, lamenting "unfair competition" (he used that term twice). And he complained about Eastern European countries' intellectual property violations of Russian/Soviet weapons with third parties. 4/

He specifically mentioned Ukraine's Motor Sich working on Indonesia's Russian-made Mi-17 helicopters, which is interesting considering Indonesia's Feb 2018 purchase of 11 Su-35S fighters (though the payment has not yet gone through). 5/

Shugaev said that 10-15% of Russia's portfolio is for after-sales service (traditionally a weak spot for Russia's OPK), which is becoming a priority. He also noted that the geographic destinations of Russian arms have not changed much. 6/

He, of course, emphasized the nearly $10 billion worth of new contracts signed by India in October and November, including a new order from Bharat Dynamics for the licensed production of Konkurs-M ATGMs. He said negotiations over the Ka-226 and AK-103 in India are continuing. 7/

He estimates several hundred thousand AK-103s will likely be built in India. He said India has a 40-year warranty on the INS Vikramaditya that is serviced by Russian specialists and parts, and that India requested upgrades for their MiG-29K/UB to improve their reliability. 8/

Shugaev says that Russia recommends modernizing the carrier-based fighters, but India has already put out an RFI for 57 new carrier fighters and MiG is not in the running. He said that USD is no longer used in Russian arms payments, relying instead on national currencies. 9/

As well as other forms of settlements (i.e. barter and counter-trade offsets). This, of course, makes arms contracts more costly and has delayed payments from many Russian arms customers, including India (and possibly Indonesia). 10/

He said around half of Russian arms exports go to MENA countries and that China will be among the top recipients of Russian arms in 2018. He also chose to emphasize the importance of Vietnam and Indonesia as customers. 11/

Not surprisingly, he dismissed recent criticisms from Gustavo Tarre Briceño, Venezuela's Special Representative to OAS, regarding Russian weapons (he didn't mention the nearly 10 years it has taken to open an AK-103 facility in Venezuela). 12/

Shugaev said the $50 million Russian loan, in the framework of state credit, to Cuba for Russian weapons has been signed, and said that future Russo-Cuban defense cooperation is strategic and long-term designed to strengthen Cuba's defense industry. 13/

He denied that Bangladesh is receiving Pantsir-S1 AD systems as part of a 2013 loan, and he signaled that Indonesia's purchase of 11 Su-35S fighters continues to plagued with problems, which needs to be worked out before discussing deliveries of Project 636 diesel submarines. 14/

Shugaev said $7 billion of Russia's arms export portfolio is for China, and that China receives 10-15% of Russian arms exports. He also signaled that Russia would be happy with future joint development programs with Beijing. 15/

Regarding arms sales to Iran, Shugaev said Russia won't export offensive weapons until 2020 (because of the UN Security Counsel Resolution), but he noted that Russia could provide new AD systems and that Russia has delivered EW systems as well. 16/

"In particular, we could offer Iran a project to create a system of integrated protection and defense of the Persian Gulf coast."
"We could or did we offer?"
"Could offer. 2020 is not far off, in this regard, we believe that a new stage of interaction with Iran will begin." 17/

Russia still has $1 billion arms contracted for Iraq, largely to upgrade an armored brigade. Shugaev denied that Pakistan has expressed interest in the Su-35S yet, though he did state that India's program of diversified imports will influence Russia's decision to arm Pakistan.18/

Despite a 2017 contract, UAE still has not moved forward with procuring the Su-35S and joint fighter program. He said Russia continues both commercial and mil assistance exports to Syria, including for air munitions, ammunition, small arms, and repairs (MiG-29 and Pechora). 19/

He said CSTO members account for 3-5% of Russian arms exports, and that transfers to them, "should be considered in the context of strengthening both national and collective security" (i.e. not primarily though a commercial lens). 20/

The CSTO has an integrated air defense system and it attempts to standardize military equipment across its members. He said Russia has recently signed development agreements with Belarus (2009), Armenia, Kazakhstan, Uzbekistan, and Kyrgyzstan (2016 and 2017). 21/

Which eliminates license fees (i.e. Rosoboronexport commission fees, though some large contracts still go through ROE). In 2018, Russia delivered Tor AD systems and T-72B3 tanks to Belarus and Mi-35 to Kazakhstan. 22/

He said Turkey has $1 billion worth of Russian arms contracts, and that the first S-400 systems will be delivered in the fall of 2019. Shugaev said Russia is open to further defense cooperation and tech transfer of aviation equipment and engines to Turkey. 23/

He said the S-400 contract has an option for "technology cooperation" and localizing the production of some S-400 components. Lastly, he said there were 10 or more countries interested in the S-400, mostly in the Middle East, but also some unexpected ones. 24/