* India had expected to receive $2.3 bln ship this year
* Engines suffered during full-speed test, paper reported
* Blow to prestige of world's second largest arms exporter
By Thomas Grove
MOSCOW, Sept 17 (Reuters) - Russia will fail to deliver an aircraft carrier to India this year, after the $2.3 billion vessel encountered engine problems during testing, sources close to the country's weapons exporter said on Monday.
"Fixing the problem entails changing the engines or repairing them. It will take around nine months, maybe more maybe less, but definitely more than six months," one source close to arms exporter Rosoboronexport told Reuters.
"That's why the promised delivery of the ship by the end of this year wont happen."
Kommersant newspaper reported that defects on the ship, Vikramaditya, were discovered during a sea test when the vessel accelerated to maximum speed and its emergency warning system sounded.
The report said seven of the ship's eight engines failed once maximum speed was reached and that the engine problems arose after India refused to accept the use of asbestos as an insulator.
Another source contacted by Reuters said it was likely that only three of the engines were affected but that repair or replacement could take up to a year.
Originally built for the Soviet Union as the Admiral Gorshkov, the Vikramaditya is seen as a cornerstone by both India and Russia of their defence ties.
India for years has been Russia's top arms customer, buying at least $1.6 billion worth last year, or 21 percent of all of Russia's defence exports.
"Nothing has officially been communicated to us here by our Russian counterparts. During trials, there have been always all sorts of rumours," said an Indian Navy spokesman.
"As far as we know, until the Russians communicate to us about any specific failure during sea trials, our date of receiving the ship stands."
The ship was scheduled to be delivered to the Indian Navy in time for the country's Dec. 4 naval holiday.
Last year, then President Dmitry Medvedev threatened to buy foreign weapons for Russia's army if the defence industry was unable to boost the quality of its products. Russia has already ordered two French amphibious landing ships, a decision sharply criticised by the Russian defence industry.
The second largest arms exporter in the world, Russia has pushed to modernise its rusting defence industry which has suffered from lack of funding and a slide in innovation since the fall of the Soviet Union in 1991. (Additional reporting by Arup Roychaudhory in New Delhi; Editing by Robin Pomeroy)