MDL, ThyssenKrupp invited for Rs 70,000 cr submarine deal negotiations

Public sector shipyard Mazagon Dock Shipbuilders Ltd (MDL) announced on Thursday that it has been invited by the Ministry of Defence (MoD) to begin negotiations from Monday for the approximately Rs 70,000 crore Project-75 India deal, under which six conventional submarines are to be built. MDL, in partnership with Germany's ThyssenKrupp Marine Systems (TKMS), remains the sole contender for the project after Larsen & Toubro's (L&T) bid was deemed non-compliant.

 

In its filings to the stock exchanges, the firm stated that while there have been no negotiations with the Indian Navy to date regarding Project-75(I), the navy and the Ministry of Defence (MoD) on Thursday invited MDL for the "first round of commercial negotiations" to be held on Monday.

 

The firm also noted that the price bid for the project was submitted to the navy and MoD on August 1, 2023, and that communication confirming the success of field evaluation trials was received on July 26, 2024. MDL further stated that the opening of the commercial bid by the navy and MoD took place on January 16, 2025.

 

The cost of the deal was initially benchmarked at approximately Rs 43,000 crore a decade ago. However, due to technological advancements, inflation, and currency fluctuations, the value is expected to increase significantly, with the deal now reportedly estimated at over Rs 70,000 crore, making it the largest defence deal in terms of value.

 

MDL recently delivered the last of the six Scorpene-class (Kalvari) submarines, INS Vagsheer, to the Navy under Project 75. The shipyard is now set to receive orders for three additional submarines under Project 75, which will also be constructed with support from France's Naval Group.

 

Along with informing the exchanges that the commercial bid submitted by it for Project-75(I) had been opened by the MoD for further processing, MDL added, "With respect to the three additional submarines of Scorpene class under the Project 75, as earlier informed, commercial negotiations with respect to the project are in process."

 

Thursday's development follows the MoD deeming the bid submitted by Indian private firm L&T non-compliant, according to an agency report. The proposal, submitted in partnership with Spanish shipbuilding company Navantia, was reportedly rejected for failing to meet the Indian Navy's requirements.

 

As part of Project 75(I), the Indian Navy plans to acquire six advanced submarines equipped with Air Independent Propulsion (AIP) systems, a critical technology that significantly enhances their underwater endurance by reducing the need to surface frequently for oxygen.

 

Project 75(I) is significantly delayed compared to the MoD's 30-Year Plan, approved by the Cabinet in 1999, which envisioned the construction of 24 conventional submarines by 2029. It was anticipated that, using the technology and expertise gained from Project 75 and Project 75(I), Indian designers and shipyards would build the remaining 12 submarines under Project 76 — a fully indigenous initiative, from design to delivery, without any foreign assistance.