Two European defense manufacturing giants are seeking to win a 400 billion rupee ($4.8 billion) order to build submarines in India as the South Asian nation looks to strengthen its navy to counter China’s expanding naval presence in the Indo-Pacific region.
(Bloomberg) — Two European defense manufacturing giants are seeking to win a 400 billion rupee ($4.8 billion) order to build submarines in India as the South Asian nation looks to strengthen its navy to counter China’s expanding naval presence in the Indo-Pacific region.
Indian officials are currently evaluating competing bids to build six of the vessels in the country, senior Indian officials aware of the developments said, asking not to be named because discussions are private. One bid is from Germany’s Thyssenkrupp AG along with Mumbai-based Mazagon Dock Shipbuilders Limited, with the other was submitted by Spain’s Navantia in partnership with private shipyard Larsen & Toubro, the people said.
India’s Navy will go for the best and largest transfer of technology that is being offered, the people said. When announcing the tender in July, the Ministry of Defense said it expected substantial technology transfer to Indian shipyards apart from providing the submarines with air independent propulsion — a technology that helps conventional vessels stay underwater for longer.
India is looking for a reliable alternative for military hardware as supplies from Russia, its biggest source of weapons, is mired in a protracted war in Ukraine and faces sanctions from the US and its allies. India, which is part of the so-called Quad grouping that includes Japan, US and Australia, is also projecting itself as a manufacturing hub and pushing for technology transfers to build complex defense platforms such as fighter aircraft and submarines.
India’s Ministry of Defense, Larsen & Toubro, and MDL did not respond to requests for comment. Thyssenkrupp confirmed the bid and referred to a June 7 statement while Navantia didn’t respond to an emailed request for comment.
Shares in Indian shipyards gained on Wednesday, led by Garden Reach Shipbuilders & Engineers Ltd with a 17% rally and Cochin Shipyard Ltd at 16%. Mazagon Dock climbed 4.4% while Larsen & Toubro rose 1.2%
Aging Fleet
As Beijing has ramped up its naval capacity in recent years, India’s aging fleet of submarines is no longer seen as enough to discourage China’s presence in the Indian Ocean.
India’s navy needs a minimum of 24 conventional submarines, the government in New Delhi has said, but currently has only has 16. Of these, most are more than 30 years old and likely to be decommissioned in the next few years.
Last July, India’s Ministry of Defense issued a tender inviting global defense manufacturers to design, develop and manufacture conventional diesel-electric-powered submarines with either government-owned Mazagon Dock Shipyard Limited or Larsen & Toubro, one of India’s biggest construction companies.
The aim is to progressively build homemade capabilities to “manufacture complex weapon systems,” India’s Ministry of Defense Ministry said when announcing the global tenders.
–With assistance from Kamil Kowalcze and Ashutosh Joshi.
(Updates with market moves)
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