Germany set to offer advanced submarines to India via Government-to-Government Deal

The German government is reportedly preparing to propose a sale of advanced conventional submarines to India through a government-to-government (G-to-G) route. This proposal is expected to be presented to the Indian government during the upcoming visit of the German Defense Minister. India’s Navy has been looking to purchase six advanced diesel-electric submarines for Project-75I, which has been stuck for some time due to technical issues. The submarines are estimated to cost over ₹45,000 crore, and their acquisition is crucial to India’s sub-surface fleet, which has been dwindling.

What is Project – 75I?

Project-75I is a submarine procurement program initiated by the Indian Navy to acquire six advanced diesel-electric submarines with Air-Independent Propulsion (AIP) technology. The project aims to enhance the Indian Navy’s underwater combat capabilities and replace its ageing fleet of submarines. The submarines will be built indigenously in India in collaboration with foreign original equipment manufacturers (OEMs) under the strategic partnership model of the procurement procedure. The total estimated cost of the Project-75I program is over ₹45,000 crore.

It started back in June 1999 when the Cabinet Committee on Security approved a plan for the Indian Navy to build indigenous submarines and induct them by 2030. The project was divided into two phases – P-75 and P-75I. In 2005, India and France signed a contract worth $3.75 billion to build six Scorpene class submarines under the first phase of P-75. The project was executed by Mazgaon Docks Ltd and DCNS (now known as Naval Group). The first submarine was commissioned in December 2017, and the remaining five were completed by April 20.

The P-75I phase aims to build six conventional submarines with advanced sensors, weapons, and an Air Independent Propulsion System (AIP). In 2019, the project was approved by the Defence Acquisition Council led by Nirmala Sitharaman under the strategic partnership model. The government selected an Indian shipyard, which nominated the foreign original equipment manufacturer (OEM). A high-powered committee evaluated eight Indian shipyards and selected Mazgaon Dockyard Limited and Larsen and Toubro as the chosen ‘Selected Partner’.

In addition to Naval Group, four other companies – Rosoboronexport from Russia, Thyssenkrupp from Germany, Navantia from Spain, and Daewoo from South Korea – participated in the bidding process.

France pulling out of the deal

In the past, Naval Group, a French defence company, pulled out of Project 75I saying that it could not meet the conditions mentioned in the Request for Proposal (RFP). The reason for exiting the project was due to the unproven status of the fuel cell AIP (air-independent propulsion) that the RFP demanded. Laurent Videau, Country and Managing Director, Naval Group India, stated to News18, “The present RFP requires that the fuel cell AIP (Air-Independent Propulsion) be sea proven, which is not the case for us yet since the French Navy does not use such propulsion system.”

Proposal for Submarines Through G-to-G Route

According to the sources quoted by The Hindu, Germany is now preparing a proposal to sell advanced conventional submarines to India through the G-to-G route. This proposal is expected to be presented to the Indian government during the upcoming visit of the German Defense Minister.

German Chancellor Olaf Scholz inspects a guard of honour during his ceremonial reception at the Forecourt of India’s Rashtrapati Bhavan Presidential Palace in New Delhi, India, February 25, 2023. REUTERS/Adnan Abidi

Discussions during German Chancellor Olaf Scholz’s Visit

During the visit of German Chancellor Olaf Scholz in February, the issue of selling advanced conventional submarines to India was reportedly discussed. Officials said that the German Defense Minister’s visit to India in the next few months could be an opportunity to formally present the proposal.

Selection of Indian Partners and Foreign OEMs

In January 2020, the Defense Acquisition Council (DAC) shortlisted Mazgaon Docks Ltd. (MDL) and Larsen & Toubro (L&T) as the Indian partners for the Project-75I deal. The five foreign original equipment manufacturers (OEM) are Daewoo Shipbuilding & Marine Engineering (South Korea), Naval Group (France), Navantia (Spain), Rosoboronexport (Russia), and Thyssenkrupp Marine Systems (TKMS, Germany).

Request for Proposal and Technical Issues

The Request For Proposal (RFP) was originally issued in July 2021 to MDL and L&T with 12 weeks to respond and has since been extended several times, the latest being up to August 2023. The project has faced technical issues, including a specification that the submarine should have an operational Air Independent Propulsion (AIP) module with an endurance of two weeks. Only Germany and South Korea technically meet this criterion, according to sources. OEMs also raised concerns about unlimited liability on them.

Concerns Remain

Officials recently clarified some issues, but industry sources claim that concerns still remain. Recently, TKMS, which was in talks with L&T, decided to partner with MDL, while Daewoo reportedly has administrative issues. Officials stated that a single-vendor situation could stall the entire process. Once a selection is made, the deal would need to be processed through an Inter-Governmental Agreement, given the technical complexities involved.

Current Submarine Fleet of the Indian Navy

The Indian Navy currently has 16 conventional submarines in service, including seven Russian Kilo-class submarines, four German-origin HDW submarines, and five French Scorpene-class submarines. The sixth Scorpene is expected to join service early next year. With the Kilos and the HDWs ageing, a Medium Refit-cum-Life Certification (MRLC) program is underway to increase their life, but even that would not arrest the dwindling sub-surface fleet of the Navy.

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