Modi govt asks global warship makers to build new submarines for $6.6 bn

Prime Minister Narendra Modi’s administration has asked global warship makers to submit proposals to build six conventional submarines in India to boost local shipyard capability and plug gaps in the navy’s underwater warfare fleet.

France’s Naval Group SA, German Thyssenkrupp Marine Systems GmBH, Swedish Saab Kockums, Spanish Navantia SA and Russian Rosoboronexport OJSC were asked to show if they can transfer technology to build the diesel-electric powered submarines in India, people familiar with the matter said in New Delhi, asking not to be identified as the discussions were private.

The request for expression of interest to the foreign companies were issued earlier this month, they said, but the award of contract could take at least three years.

Defense ministry spokesman Aman Anand wasn’t immediately available for comment.

The government issued a separate expression of interest on June 20 for an Indian shipyard to build the submarines at a cost of 450 billion rupees ($6.6 billion). The program is already delayed by at least three years.

The Indian shipyards asked to respond include two private companies -- Larsen & Toubro Ltd and Reliance Naval & Engineering Ltd. -- as well as five state-owned groups Mazagon Docks & Engineers, Garden Reach Shipbuilders & Engineers Ltd, Goa Shipyard Ltd, Hindustan Shipyard Ltd and Cochin Shipyard Ltd.

The Indian shipyard selected under the process would tie up with the chosen foreign company to establish dedicated manufacturing lines for the submarines in India.

There would be an option to build six more submarines under the same project.

Modi’s government is aiming for 50% indigenous content in its new submarines program, and aims to fully produce its own submarines through the technology transfer, Indian Navy’s Controller of Warship Production and Acquisition Ajay Kumar Saxena said in New Delhi on Monday.

China Dominance

India is woefully short on underwater fighting capabilities.

The navy has a fleet of just 13 conventional submarines, all at least 20 years old. Its plan, approved in 2000, envisaged the construction and induction of 24 conventional submarines by 2030. This acquisition schedule has been hit by delays of more than six years in the program to build six French Naval Group-assisted Scorpene submarines at the state-owned Mazagon Docks and Engineers.

It also has a locally-manufactured nuclear-armed vessel and a nuclear-powered vessel borrowed from Russia in 2012 on a 10-year lease worth $1 billion.

That compares with China’s vast fleet, which includes 50 conventionally-powered, four nuclear-armed and six nuclear-powered attack submarines. Beijing’s submarine force will likely grow to between 65 and 70 submarines by 2020, according to the US Defense Secretary’s report to the Congress in May.