NEW DELHI, December 25 (RIA Novosti) - India has ordered 300 modernized T-90 main battle tanks from Russia, an Indian television channel said Monday.

Under the terms of to the $950-million contract, the T-90S tanks, which are equipped with advanced fire-control systems, will be delivered to India over the next two years, an Indian military official said.

The contract is part of a deal on the delivery and licensed production of T-90 tanks, signed by Russia and India in 2001.

India bought 310 T-90S in 2001 for $800 million. Russia began deliveries of the first order of 124 tanks in 2002 and completed them this year. The remaining 186 have been assembled at the Avadi Heavy Vehicles Factory in India.

The Indian Army was the first export customer for the T-90S, which has been in Russian Army service since the mid-1990s. The T-90S tanks have been deployed with six armored regiments in northern and central India.

The associated license agreement provides for the assembly of up to 1,000 T-90S tanks in India with production scheduled to begin in 2007.

According to various sources, the current order is driven by the fact that the Indian Army urgently needs modern main battle tanks (MBTs) due to serious delays in the production of the domestic Arjun MBT.

In addition, the upgrade of the Army's Soviet and domestically built 1,500 T-72M1 MBTs, which constitute the backbone of the county's armored regiments, has been lagging behind schedule.

Arms exports remain highly important for the Russian economy. President Vladimir Putin said in March that Russia increased its military hardware exports to more than $6 billion in 2005, and has supplied weapons to 61 countries.

India and China remain leading importers of Russian armaments, accounting for 80% of the country's total weapons exports. However, Russia has been looking to expand its presence on arms markets in Latin America and the Middle East.