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Medvedev Says Russia May Lease Nuclear Subs To India

MOSCOW (Reuters) -- Russia may lease out nuclear-powered submarines to India, President Dmitry Medvedev has been quoted as saying.

Russia has a large fleet of nuclear-powered but conventionally armed submarines besides its force of strategic nuclear-armed vessels. Medvedev appeared to be referring to the former in an interview with Indian journalists.

"We are talking also about cooperation in the sphere of leasing atomic submarines," Medvedev said, according to a Kremlin transcript. "This is, in fact, also an important and highly technological area of cooperation."

Nuclear-armed India has tense relations with its neighbor Pakistan, which also has nuclear weapons. Ties have been further tested by recent attacks in Mumbai that killed 171 people and which India believes were conducted by a Pakistan-based group.

Indian media have reported that India is interested in leasing nuclear submarines including the Nerpa, which suffered an accident during trials in the Sea of Japan last month that killed 20 people. The Russian military had denied those reports

The Nerpa is nuclear-powered, but built to carry conventional weapons -- torpedos, underwater missiles, and cruise missiles.

India is one of Russia's biggest clients for arms sales, but New Delhi has been upset by delays to Russia's delivery of an aircraft carrier.

Moscow has pushed back the delivery of the carrier to 2012 and pushed up the price. Medvedev said both sides needed to agree the final outline of the "Admiral Gorshkov" project.