The project represents a test of Indian Prime Minister Narendra Modi’s new defence acquisition policy. - Photo: AFP
NEW DELHI: India’s US$6 billion plan to build submarines has stalled because of contractor complaints over whether proper procedures were followed during tests at sea, delaying the navy’s efforts to bolster its capabilities as China expands its presence in the Indian Ocean.
The South Asian nation’s bid to build six conventional diesel-electric subs is now delayed by a year and further delays are expected, according to two senior officials directly aware of the situation who asked not to be identified because the information is not public.
The development is more than a setback to India’s efforts to upgrade its military: The project also represents a test of Prime Minister Narendra Modi’s new defence acquisition policy.
That policy requires foreign manufacturers to partner and provide local firms with technology to build military hardware in India, the world’s largest weapons importer.
German defence manufacturer ThyssenKrupp Marine Systems, in partnership with India’s state shipyard Mazagon Dock Shipbuilders, and private shipbuilder Larsen & Toubro (L&T), with Spain’s Navantia SA, are competing for the project.
Mazagon shares tumbled more than 2 per cent in India trading, extending losses that reached 4.4 per cent, after news of the delay was reported.
Shares of state-run shipbuilders, including Garden Reach Shipbuilders & Engineers and Cochin Shipyard, also fell. About half a dozen objections were raised by local contractors as the navy came close to picking a winner following crucial field trials in June of some of the key technologies needed for the subs, the people said, without naming the companies involved.
Each objection will need to be investigated before the process can proceed.
Complaints ranged from alleged violations of proper procedures to unclear guidance on how to conduct the sea trials, the people said.
The nature and timing of the complaints raise questions about whether contractors are trying to stall the project because they fear losing out, the people added.
The Indian Navy and Mazagon did not respond to e-mails seeking comments.
“The field trial evaluation process is ongoing at the Ministry of Defence; it would be inappropriate for us to comment on it in any manner at this stage,” L&T said in response to an e-mail seeking details about the objections raised.
India’s Ministry of Defence has formed a committee to evaluate both proposals and advise the government on a final decision, the people said.
Leading a country long dependent on Russian weapon systems, Mr Modi not only wants to wean off India’s reliance on imported hardware, but also build up the nation’s ability to export weapons.
There is little doubt that India’s fleet is showing its age.
Half of its conventional submarines – comprising about 16 Russian and German-made vessels – have undergone multiple upgrades and retrofits over the last three decades, but are now nearing the end of their productive lives.
The first of the six new submarines was scheduled to join the fleet by early next decade as the decommissioning of older Indian vessels gathered pace.
India also plans to build two nuclear-powered submarines carrying conventional weapons.
A successful submarine construction programme would also boost India’s appeal as an alternate low-cost manufacturing hub for weapon platforms, just as demand for military hardware soars in Europe on the back of Russia’s war in Ukraine.
In addition, India has strengthened ties with several Western allies, including through the Quad bloc with the US, Australia and Japan, and is expected to play a key role in countering China’s presence in the Indo-Pacific.
German Chancellor Olaf Scholz and Spanish Prime Minister Pedro Sanchez visited India in quick succession in October, meetings in which defence issues – including Modi’s efforts to build up domestic capacity – featured prominently, according to read-outs of the separate talks.
“Both sides committed to supporting strategic exports to India and encouraged co-development, co-production and joint research between the respective defence industries,” India and Germany said in a joint statement on Oct 25. - Bloomberg
