2 billion funding is provided by New Delhi.
According to Russian media, India has no alternative but to allocate the required funds, despite recent objections from the government's accounting office, because the Indian Navy desperately needs to replace its INS Viraat, which, although currently operational, is now 50 years old.
After modernisation, the carrier will join the Indian Navy as INS Vikramaditya, and is expected to be seaworthy for 30 years.
Admiral Gorshkov is a modified Kiev class aircraft carrier, originally named Baku.
The ship was laid down in 1978 at the Nikolayev South shipyard in Ukraine, launched in 1982, and commissioned with the Soviet Navy in 1987.
It was renamed after the collapse of the Soviet Union in 1991.
In 1994, following a boiler room explosion, the Admiral Gorshkov sat in dock for a year for repairs. After a brief return to service in 1995, it was finally withdrawn from service in 1996 and put up for sale.
The ship's displacement is 45,000 tonnes. It has a maximum speed of 32 knots and an endurance of 13,500 nautical miles (25,000 km) at a cruising speed of 18 knots.