New Delhi: India has signed a $3.3 billion deal with Russia for leasing the third nuclear-powered Akula class attack submarine even as the threat of US sanctions loom large over the contract for Russian S-400 Triumf missile systems in October last year.

According to reports, the two countries signed an Inter-Governmental Agreement (IGA) was signed in New Delhi on Thursday. The submarine, to be called Chakra -3, will be delivered in 2025 for a 10-year period.

An extensive re-fit process at the Zvedochka shipyard, Severodvinsk, would fix the submarine out of one of the several Akula class submarine hulls available
there. As of now, India operates Chakra-2 whose 10-year lease ends in 2022.

This is the second major India-Russia defence project finalized this month. Before this, a new facility to manufacture AK-203 assault rifles is coming up in Amethi in Uttar Pradesh.

INS Chakra is a nuclear-powered submarine and unlike INS Arihant, the other nuclear submarine in the Indian Navy fleet, it does not have a strategic weapon.

Meanwhile, the Navy is all set to induct its second French Scorpene submarine _ Khanderi _ next month. The first submarine in this class,  INS Kalvari, is already under operation. The Navy will get four more boats in the coming years.

This deal, however, could further irk the US which seeks to prevent countries from buying Russian weapons or Iranian oil through its CAATSA (Countering America’s Adversaries through Sanctions Act).

Though India is hopeful of getting US presidential waiver for the S-400 deal, this new submarine deal could complicate matters between the two countries. “Repeated waivers for India, which the US wants to progressively reduce its dependence on Russian weapon systems, will be a problem,” an expert was quoted as having said by a daily.