Russia on Saturday ceremonially handed over a refurbished ex-Soviet aircraft carrier to India after a refit that overran by five years and went vastly over budget, damaging ties between the countries.

Russian Deputy Prime Minister Dmitry Rogozin and Indian Defence Minister A.K. Antony took part in a ceremony at the Arctic port of Severodvinsk on Saturday morning, Russian television reported.

"What happened today is a demonstration of the readiness and restored ability of our country to build warships of such a class," Rogozin told journalists in televised comments from the shipyard.

Russian sailors lowered their national flag on the ship and the new owners raised the flag of the Indian navy in its place as the Indian crew in full parade uniform stood on board on a chilly blustery day.

The wife of the ship's captain broke a coconut against the side of the carrier.

Russia, which is India's largest arms supplier, carried out a major refit of the aircraft carrier, which joined the Soviet navy in 1987 as the Admiral Gorshkov. It has now been renamed the INS Vikramaditya after an Indian emperor.

The original deal signed in 2004 saw Russia agree to modernise the mothballed carrier for $771 million (571 million euros) by 2008. But costs ballooned to $2.3 billion, according to Indian media reports, as the deadline was regularly extended.

Russia says that the original deadline was based on an incorrect assessment of the amount of work that needed to be completed by its Sevmash shipyard, which specialises in nuclear submarines. The refit included extending the flight deck.

The ship's captain, Suraj Berry, and the deputy director of Russia's arms export agency, Igor Sevastyanov on Saturday signed the final papers handing over the ship.

The ship is due to set sail on November 30 and arrive in India early next year. It will have a team of Russian experts on board who will monitor and assist their Indian counterparts during the home journey.

Five warships will escort the unarmed Vikramaditya due to security issues as it passes through a classified route, an Indian defence ministry official who did not want to be quoted, told AFP.

The refurbished ship is 284 metres long and is designed to carry 30 aircraft including MiG-29K fighters. Its crew numbers 1,600 and the 44,500 ton-carrier has even been adapted to dish out Indian food.

The aircraft carrier will become India's second, intended to shore up the country's defence capabilities as it seeks to counter a military build-up by an increasingly assertive China.

India in August unveiled a domestically produced carrier that is under construction.

Russia's long-delayed upgrade could damage its prospects as a supplier to India, the world's largest arms buyer, which has recently turned to Israel, France, Britain and the United States.

India's already depleted naval force received a major setback in August when a Russian-made submarine the INS Sindhurakshak exploded in a Mumbai dock, killing all 18 crewmen on board.