Russia and India have reached an agreement...

Moscow and New Delhi had been wrangling over the final cost of the project since Russia said it had underestimated the cost of modernization, and asked for an additional $1.2 billion, a sum that India called "exorbitant."

The source did not name a figure for the new deal.

Under the original $1.5-billion 2004 contract between Russia"s state-controlled arms exporter Rosoboronexport and the Indian Navy, which includes delivery of MiG-29K Fulcrum carrier-based fighters, work on the aircraft carrier was to be completed in 2008.

After long-running delays and disputes, India offered in February 2008 to raise the refit costs for the aircraft carrier, docked at the Sevmash shipyard in northern Russia for the past 12 years, by up to $600 million.

Russia said it was not satisfied with the proposed amount, and the issue of the additional funding had remained unresolved until now.

The Admiral Gorshkov is a modified Kiev-class aircraft carrier, originally named

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