The deal, which was finalized ahead of Russian leader Vladimir Putin's visit to India this week, puts an end to negotiations that have been going on for a decade.
The submarine will be larger than the two submarines that the Indian Navy already has. It is due to be delivered within two years.
The leasing agreement for the Russian submarine runs for ten years and will give India the opportunity to train submariners and shape its submarine strategy during a time when the country is building its own submarines.
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