Rs 1 lakh crore submarine push: India eyes two mega deals to boost naval power

The first project that is being negotiated is for the procurement of three Scorpene submarines, which will be jointly constructed by state-run Mazagon Dock Limited (MDL) and French defence major Naval Group.

India is likely to seal two mega submarine deals worth over Rs 1 lakh crore by the middle of next year to ramp up its undersea warfare capabilities against the backdrop of China’s growing naval strength, authoritative sources said to news agency PTI on Sunday.

The first project under negotiation involves the procurement of three Scorpene-class submarines, to be jointly constructed by state-run Mazagon Dock Limited (MDL) and French defence major Naval Group. Though the defence ministry cleared the nearly Rs 36,000 crore deal over two years ago, negotiations on several technical and commercial aspects delayed its finalisation, the sources said.

The second project on the table is the acquisition of six diesel-electric stealth submarines at an estimated cost of Rs 65,000 crore. The procurement was initially approved in 2021. “We are expecting both contracts will be firmed up by the middle of next year,” a source said to PTI.

While the proposed acquisition of six stealth submarines under Project-75 India (P75-I) is entirely new, the three Scorpenes are a follow-on order. Under the Navy’s Project-75, six Scorpene-class submarines have already been built by MDL in collaboration with the Naval Group. The Navy wants both deals expedited to strengthen its underwater fleet, one official said.

German shipbuilder ThyssenKrupp Marine Systems (TKMS) has partnered with MDL for the programme, billed as one of the biggest ‘Make in India’ defence projects in recent years. According to the sources, cost negotiations for the deal will begin shortly and could take six to nine months before a contract is signed.

The sources added that while commercial talks for the Scorpene project are nearly complete, the P75-I negotiations will take longer. If all goes as planned, the Scorpene deal may be finalised early next year. “There have already been inordinate delays in the Scorpene submarine project and we hope it will be concluded soon,” said one of the sources.

Deliveries of the submarines from both projects are expected to begin about six years after contracts are signed. Asked if MDL has the capacity to execute both deals simultaneously, the sources said it would be up to the shipbuilder to expand its infrastructure.

The defence ministry had earlier given in-principle approval for the additional Scorpenes as well as for the procurement of 26 naval variants of Rafale jets from France. In April, India and France sealed an intergovernmental agreement for the ₹64,000 crore (Euro 7 billion) Rafale marine jet deal for deployment on the Navy’s aircraft carrier INS Vikrant.

*With Agency Inputs