The Ministry of Defence's January 22 nomination of Larsen & Toubro (L&T) and the state-owned Mazagon Dock Shipbuilders Ltd (MDL), to build six conventional submarines has pitted the two Indian submarine builders in an exciting contest.

The six Project 75I submarines will be built by one of the two chosen firms in collaboration with a foreign technology partner for around Rs 45,000 crore. L&T and MDL are the only two in-country submarine builders, which is why the MoD ejected newbies Adani Group and Reliance Defence.

L&T has fabricated hulls for India's fleet of four 6,000-tonne Arihant class submarines, one of which is in service. MDL is building six 1,800-tonne Scorpene class submarines, two of which are in service.

The P75I - being built by the two Indian yards in collaboration with a pool of five shortlisted foreign manufacturers - aims to build six new diesel-electric submarines equipped with Air Independent Propulsion (AIP).

What's Next?

The Navy is currently firming up detailed specifications for the subs.

Request for Proposals will be issued to the two firms by the middle of this year. Significantly, the MoD doesn't envisage any funds outgo on this project for at least two years - the contract will be placed on to the lowest bidding consortium only around 2022.

This suits the cash-strapped Navy which has had to cut back on its acquisitions after seeing a steep decline in its budgetary allocations. Who will the two shipyards tie-up with? The Defence Acquisition Council has shortlisted five foreign original equipment manufacturers - Navantia (Spain), Rubin Central Design Bureau (Russia), ThyssenKrupp Marine Systems (Germany), DSME (South Korea) and Naval Group (France).

Theoretically, both yards could even tie-up with the same foreign supplier, though this seems unlikely. MDL is already building Scorpenes with Naval Group which means the existing infrastructure will enable it to significantly reduce its bidding price. L&T has in the past indicated a partnership with Russia's Rubin.

If these legacy tie-ins materialise, it could see another interesting contest between two of India's strategic partners France and Russia.