He also said a new $1bn contract with India for T-90S tanks and other weapons would be signed by the main Russian state-run arms exporter, Rosoboronexport, in the first quarter of this year.

Russian defence officials say their goal is to sell $6bn of weapons per year - a fraction of the $20bn exported by the Soviet Union in the 1980s.

A Russian think-tank last month estimated income from arms sales in 2000 at $3.8bn, up from $3.4bn in 1999.

Customers

China and India were the leading customers throughout the 1990s, each purchasing more than $1bn of Russian arms each year, but Russia views Iran as another promising market, despite US disapproval.

Defence Minister Igor Sergeyev wooed Iran during December visit

Russia told the US at the end of November that it was ending its five-year-old undertaking not to sell conventional weapons to Iran.

Estimates of the potential value of new arms sales to Iran - currently flush with oil revenues - range from $1bn to $7bn.

Meanwhile Jane's Intelligence Review has suggested that a new Russia-China military pact could result in $15bn in arms sales.

Competitors

But defence analysts say that Russia's long-term ambition to raise income from arms sales is likely be frustrated by the shortage of funds to develop new weapons.

India and China are also learning how to produce their own more sophisticated versions of Russian weapons they have imported and cloned.

China's own arms exports are now on the rise.

The world's biggest arms exporter is the United States.

According to the Stockholm International Peace Research Institute, Russia sold $16.4bn of arms in the period 1995-99, compared to the US's $53.4bn.