India's ambitious $6 billion submarine project has encountered significant delays, primarily due to complaints from contractors regarding procedural issues during sea trials. This project aims to enhance the Indian Navy's capabilities by constructing six advanced diesel-electric submarines, crucial for countering China's growing influence in the Indian Ocean region.

The primary contenders for this project include:

ThyssenKrupp Marine Systems (Germany) with Mazagon Dock Shipbuilders Ltd
Navantia SA (Spain) with Larsen & Toubro Ltd

Reasons For the Setback

Contractor Complaints: Reports indicate that several contractors have raised concerns about procedural violations and unclear guidance during the June sea trials of key technologies. These complaints are reportedly numerous, with at least six significant objections noted, which have led to a halt in progress.

Delays And Investigations: The project, which has already been postponed by a year, may face further delays as each complaint requires thorough investigation before proceeding. Some officials speculate that these grievances might be strategically timed, possibly reflecting contractors' fears of losing out in the final selection process.

The news of these delays has already affected stock prices for involved companies, including Mazagon Dock Shipbuilders Ltd., which saw a drop of over 2% following the reports. Other state-run shipbuilders also experienced declines in their stock values.

The submarine project is part of India's broader defence modernization efforts under Prime Minister Narendra Modi's "Make in India" initiative, which emphasizes domestic manufacturing and technology sharing with foreign partners. 

This initiative is not only vital for replacing India's aging submarine fleet but also plays a critical role in bolstering national security amidst rising tensions in the Indo-Pacific region due to China's maritime assertiveness.

The delays highlight ongoing challenges within India's defence procurement processes and raise concerns about the country's readiness to address emerging geopolitical threats. With the Indian Navy's current fleet comprising 16 submarines—many nearing the end of their operational life—the timely completion of this project is essential for maintaining strategic balance in the region.

India has long been dependent on Russian weapon systems, the government not only wants to wean India’s reliance on imported hardware but also build up the nation’s ability to export weapons.

The government has cleared the construction of two nuclear-powered attack submarines (SSNs) under Project-77 (formerly Project 75 Alpha), with a budget of approximately ₹40,000 crore. This initiative aims to bolster the Indian Navy's capabilities against growing Chinese naval activities in the Indian Ocean, reflecting a strategic shift towards enhancing sub-surface deterrence capabilities.

India strives to enhance its naval capabilities through this submarine project, procedural hurdles and contractor disputes have introduced significant uncertainty into its timeline and execution, potentially impacting its defence strategy against regional adversaries.