Evaluation of bids for Navy’s mega submarine deal underway: Report

New Delhi: The Indian Navy’s mega submarine deal under Project-75I, estimated to cost upwards of ₹43,000 crore, has moved to the evaluation stage with compliance checks of the two bids received, as per the media reports.

One of the bids is from the TKMS (Thyssenkrupp Marine Systems). An Indian Navy team visited TKMS in March and conducted the Field Evaluation Trials (FET) and it has met the criteria specified, multiple sources confirmed.

The FET of Navantia of Spain, the second bid, is expected to be completed before June, it has been learnt. An Indian Navy team visited the TKMS and carried out FET from March 22 to 28, two sources independently confirmed the Hindu.

Meanwhile, the German government is expected to take up a stake in submarine manufacturer, the TKMS (Thyssenkrupp Marine Systems), and discussions are on.

The German government’s move to pick up a stake in the TKMS is in line with the company’s desire to convince its stakeholders of the viability of the submarine business, sources said noting that it would automatically bring in the Government-to-Government part, essential for a deal of this size and technological sophistication. The TKMS was initially not inclined to bid for P-75I due to its scope and complexity but was later convinced by the German government to bid for it, the two sources cited above confirmed.

The war in Ukraine and change in Europe’s security outlook also contributed to the German government’s interest in expanding defence cooperation in a big way, sources said.

The request For Proposal (RFP) issued by the Navy detailing the specifications states that the first submarine should have indigenous content (IC) of 45% which should go up to 60% for the sixth and last submarine.

The final design will be done jointly by the TKMS and the MDL. “MDL will be able to give 60% IC from the first submarine itself and India will own the design which enables it to make any integration of indigenous equipment as desired even at a later stage,” one source stated.

In a major decision as the deal moves forward, Germany early April granted small arms licence to India, a significant exception given the ban on exports to third countries, and in the last couple of months liberalised the licensing requirements for sale of military equipment as required under its BAFA (Federal Office for Economic Affairs and Export Control).

Only Germany and Spain submitted bids for the deal, the deadline for which saw several extensions before finally culminating in July 2023. The deal is being progressed under the Strategic Partnership model of the defence acquisition procedure. Larsen & Toubro (L&T) and the MDL are the two Indian shipyards shortlisted to partner with foreign submarine manufactures to manufacture six advanced conventional submarines in India with significant technology transfer.

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