Only Germany and Spain submitted bids for the deal, the deadline for which saw several extensions before finally culminating in July 2023

by Dinakar Peri

The German government is expected to take up a stake in submarine manufacturer, the TKMS (Thyssenkrupp Marine Systems), and discussions are on, it has been learnt. Meanwhile, 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, one of which is from the TKMS.

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 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 German government’s move to pick up a stake in the TKMS is in line with the company’s interest and would strengthen its shareholders’ confidence, sources observed.

The design offered by the TKMS for P-75I is based on its highly successful Class 214 submarine as well as Class 212CD, with the submarine featuring angular design for minimised radar cross-section, it has been learnt. Meanwhile, Mazagon Dock Shipbuilders Limited (MDL), the Indian partner of the TKMS, has begun work on the first phase of submarine design, sources in the know said.

Indigenous Content

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.

Navantia has offered a submarine based on its S80 class, the first of which was launched in 2021 and was commissioned into the Spanish Navy as S-81 ‘Isaac Peral’ last November, while L&T will be responsible for constructing the submarines. The Spanish government has a stake in Navantia.

AIP Condition

The key determinant to qualify for P-75I is the Air Independent Propulsion (AIP) system. The P-75I process ran into rough weather, among other issues, over the specification that the submarine on offer should have an operationally proven AIP module with an endurance of two weeks. In addition, manufacturers had also raised the issue of unlimited liability on them, some of which have since been addressed by the Defence Acquisition Council, but yet to be fully resolved, according to sources. The AIP condition meant only two manufacturers were left in the race.

The AIP on offer by the TKMS has both fuel cell as well as Lithium-Ion battery, giving it enhanced performance, one of the sources said. The fuel cell gives long range endurance at low speed while Lithium-Ion battery offers high endurance at higher speed, the source said, elaborating, while stating that it’s a fourth generation AIP with the technology having matured since first developed three decades ago.

An AIP module acts as a force multiplier as it enables conventional submarines to remain submerged for longer duration, thereby significantly enhancing the endurance while reducing chances of detection, as submarines are most prone to be spotted when they surface. An indigenous AIP module under development is set to be installed on the Scorpene submarines as they go for refit end this year or early next year onwards.

Germany has presented a Government-To-Government (G-To-G) proposal to India for the sale of submarines under P-75I, and a senior German delegation was in Delhi in January for discussions. Sources said the German government is expected to continue talks on the G-to-G proposal in the next few weeks.

India and Germany discussed the deal at the highest level during the visit of German Defence Minister Boris Pistorius in June 2023, during which he made a strong pitch for the bid by the TKMS in his talks with Defence Minister Rajnath Singh.

MDL has in the 1980s manufactured two of the four older German HDW Type 209 submarines still in service with the Indian Navy.

(With Reporting by The Hindu)