India gets USSR arms at bargain-basement prices

Indian officials are minimizing their record $1.6 billion arms-supply agreement with the Soviet Union. They are playing it down as part of what an official spokesman terms their "normal pattern of multifaceted cooperation."

But the long-term arms credit at bargain-basement rates is the largest ever concluded between the two countries, which signed a friendship pact in 1971.

With the Indian subcontinent in turmoil since the Soviet troop intervention in Afghanistan, the new Indo-Soviet arms deal is sure to heighten Pakistan's traditional apprehensions about the intentions of its big neighbor to the east.

Observers in the Indian capital expect the deal to intensify pressures on the United States to open up arms sales to Pakistan, blocked since 1979 because of American suspicions that Pakistan is secretly building a nuclear bomb.

The new arms credits made front-page news in the Indian press May 28, the first day of polling for new legislatures in nine states where Prime Minister Indira Gandhi is seeking to extend her Congress-I (for Indira) Party's national parliamentary control to the state governments.

High sugar prices and power shortages are of more direct concern to voters in the nine states whose opposition governments were dismissed by Mrs. Gandhi shortly after she returned to power in January. But news of the substantial new arms deal is judged likely to enhance Mrs. Gandhi's stature as a world leader who can wheel and deal to India's advantage with the superpowers.

Officials here point out that the Soviets have been providing defense equipment to India for more than a decade, and that the agreement initialed last week in Moscow had been under discussion for 18 months. But the agreement is considered unusual because it will give India 17 years to pay -- compared to the 10 normally given by India's Western defense suppliers -- at a well-below market rate reported to be 2.5 percent.

By contrast, the American offer of arms aid to Pakistan following the Soviet invasion of Afghanistan amounted to credits of $200 million repayable at 11 percent interest. It drew a wave of denunciations in India before it was rejected as "peanuts" by Pakistan President Zia ulHaq.

Another unusual feature is that the new defense agreement covers equipment for all three of India's defense services -- Army, Air Force, and Navy. The hardware to be purchased was not specified here, but the Indian press said reliable sources cited air-to-air and surface-to-surface missiles, missile-equipped patrol boats, T-72 tanks, antitank weaponry, and electronic gear.

India has a substantial defense industry of its own, which turns out approximately 60 percent of its defense needs, according to diplomatic estimates. The Soviet Union is its largest outside supplier of sophisticated weaponry not manufactured locally and, Indians often point out, its most dependable. On India's list of the undependable is the United States, which cut off arms aid to India for periods following the 1965 and 1971 Indo-Pak wars.

Pakistan, already visualizing itself in a pincer between Soviet-dominated Afghanistan and India, is now likely to press directly or through its allies for a liberal American arms-sales policy to try to catch up with India.