Germany and Spain Compete for $4.8 Billion Indian Submarine Contract

16 Aug, 2023

Germany and Spain Compete for $4.8 Billion Indian Submarine Contract

Two prominent European defense manufacturing giants are vying for a significant 400 billion rupee ($4.8 billion) contract in India to construct submarines, as the country aims to bolster its naval strength in response to China's expanding maritime influence in the Indo-Pacific region.

Sources familiar with the matter, requesting anonymity due to the confidential nature of the discussions, revealed that Indian authorities are currently assessing competing proposals for the construction of six submarines within the country. One proposal comes from Germany's Thyssenkrupp AG in collaboration with Mumbai-based Mazagon Dock Shipbuilders Limited, while the other has been submitted by Spain's Navantia, partnered with private shipyard Larsen & Toubro.

Insiders stated that the Indian Navy intends to select the bid that offers the most extensive and advanced technology transfer. The defense ministry, upon initiating the tender in July, expressed its expectation for substantial technology sharing with Indian shipyards, along with the implementation of air-independent propulsion technology, which extends the submerged endurance of conventional submarines.

Amid challenges related to Russian military hardware procurement due to the ongoing conflict in Ukraine and sanctions imposed by the US and its allies, India is actively seeking reliable alternatives for its defense needs. Being part of the Quad alliance, which includes the US, Japan, and Australia, India is positioning itself as a hub for manufacturing and technology transfer in the defense sector, encompassing intricate platforms like fighter aircraft and submarines.

Despite attempts to seek comments from the defense ministry, Larsen & Toubro, and MDL, responses were not received. Thyssenkrupp confirmed its bid, referring to a statement from June 7, while Navantia did not provide a response to the email inquiry.

In light of China's maritime expansion, India's current fleet of submarines, which has aged over time, is deemed insufficient to counter China's presence in the Indian Ocean. The Indian government has articulated the need for a fleet of at least 24 conventional submarines, yet the present count stands at 16. Most of these submarines are over three decades old and are anticipated to be decommissioned in the coming years.

Last July, the defense ministry issued a tender inviting global defense manufacturers to participate in the design, development, and construction of conventionally powered diesel-electric submarines. The manufacturing would be undertaken either by the government-owned Mazagon Dock Shipyard Limited or by Larsen & Toubro, one of India's premier construction companies.

The overarching objective of this initiative is to gradually cultivate indigenous capabilities for the production of complex weapon systems, as emphasized by the ministry during the announcement of the global tender.