India confirmed Monday it will purchase 347 T-90 battle tanks from Russia and said it will consider a demand from Moscow that it pay an additional U.S. $1.2 billion because of delays in a deal for a Soviet-built aircraft carrier and 16 fighter jets.

Visiting Russian Defense Minister Anatoly Serdyukov and his Indian counterpart A.K. Antony also signed a protocol Monday for the joint development and production of military hardware. Another 1,000 T-90 tanks will be manufactured in India under a technology transfer agreement with Russia, an Indian defense ministry statement said.

Serdyukov said defense ties between Russia and India "are transforming from a vendor-seller relationship to joint development and production."

The 347 T-90 tanks are expected to cost India 49 billion rupees (U.S. $1.1 billion), according to Indian newspaper reports.

India has long been a top customer for Russian weaponry, but recently was involved in a well publicized dispute over a contract for a refurbished Soviet-built aircraft carrier, the Admiral Gorshkov. Antony told reporters India was considering Russia's demand for an additional U.S. $1.2 billion because of rising costs resulting from delays in the deal and a decision was expected soon.

The original 2004 contract was for U.S. $1.5 billion for the aircraft carrier and 16 fighter aircraft, the Press Trust of India news agency reported.

Russia also is courting India to win a contract to supply 126 new fighter planes worth U.S. $10 billion for the Indian air force, offering an advanced version of the MiG-29.

American, French and Swedish companies have also stepped up efforts to sign big arms deals with India.

India, whose relations with the United States remained tense during the Cold War, has no American-made combat aircraft. Its air force flies Russian-made MiG fighters, British Jaguars and French Mirages.