India set to finalize biggest submarine investment

New Delhi’s military has cleared a state-run dockyard to participate in a multibillion-dollar bid to construct next-generation stealth-capable craft

The Indian Defense Ministry will move ahead with a multibillion-dollar plan to locally construct six submarines following lengthy delays with the project, the Times of India reported on Friday. 

Mazagon Docks Limited (MDL), a state-run company that has partnered with Germany’s Thyssenkrupp Marine Systems, has qualified for the project following technical trials, according to media reports and the company’s stock exchange filings.

The scheme, dubbed ‘Project-75 India’ (P75I), is considered a landmark for the country as it aims to build six conventional diesel-electric submarines equipped with air-independent propulsion (AIP) technology. The submarines are to be built locally with a “high degree” of technology transfer from a global defense supplier.

The bid from another Indian company, Larsen&Toubro, which partnered with Spanish defense manor Navantia for the tender, was reportedly rejected as it was found “non-compliant.” According to the report, the German submarine demonstrated “a fully-functional” AIP system, while the Spanish model could not achieve the same. AIP gives a diesel-electric submarine stealth capability and endurance, allowing vessels to avoid detection for extended periods.

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The P-75I project was first envisioned in 1998 as part of a 30-year submarine-building plan, set to conclude in 2030. However, it faced major setbacks and delays. The tender will now move to the commercial negotiations stage, and according to sources cited by the Times of India, the proposal by MDL and Thyssenkrupp is expected to come through at the cost of $10 billion. This is nearly double the project’s initial cost of around $5 billion estimated when it was sanctioned back in 2010. The final cost will be agreed during negotiations with the Defense Ministry’s contract negotiation committee, the report noted. 

In 2022, France and Russia, some of the main contestants of the P75I tender, withdrew their participation. Reporting at the time, Indian media cited Andrey Baranov, deputy director general of the Rubin Design Bureau, as suggesting that the tender requirements were “unrealistic.”

The first of the new vessels are expected to be delivered around seven years after the contract is signed, the report noted. Additionally, MDL is gearing up for the construction of three French-origin Scorpene submarines at a cost of $4 billion. The contract is awaiting clearance from a Prime Minister Narendra Modi-led cabinet committee on security before March 31 this year.

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India currently operates over a dozen conventional submarines of Russian, French, and German design. The country’s navy has also inducted two nuclear submarines, INS Arihant and INS Arighat. A third nuclear-powered ballistic missile submarines (SSBNs) will be commissioned in the “coming months,” Indian Navy Chief Admiral Dinesh K Tripathi stated in December.