India has sounded out Germany for a direct government-to-government deal to buy six submarines, bypassing a competitive bidding process in what could be New Delhi's costliest military acquisitions programme.
The Indian Navy is now in the middle of finalising the specifications for and choosing a shipyard for its P75i programme to acquire six conventional submarines. The submarines must be capable of firing missiles to attack targets on land and must have air independent propulsion (AIP) that gives them more endurance to stay underwater.
The total cost of the project could top $11 billion (approximately Rs 66,000 crore).
The Indian Navy currently operates a fleet of 13 conventional diesel-electric submarines after its INS Sindhurakshak sank in Mumbai in August 2013. Four of the submarines are of German-origin.
"We asked them what they would offer if we went for the submarines in a direct government-to-government deal," said the official.
German conglomerate, Thyssenkrupp, the original builders of the U-Boat of Hitler's navy in World War II, currently owns HDW from which the Indian Navy sourced its Type 209 Shishumar-class submarines (INS Shishumar, Shankush, Shalki and Shankul) between 1986 and 1994 before the deal was hit by allegations of bribery and suspended.
Thyssenkrupp Marine Systems is now contracted to upgrade the four submarines. The upgradation involves equipping them with capability to fire Harpoon missiles.
The Project 75i programme is designed to assist the navy in beefing up its undersurface power after a three-year submarine-building project drafted in the 1990s went askew. The navy wanted 24 submarines by 2024; it now effectively has 13 with two or three constantly under refit.
Last year, the government decided to select an Indian shipyard for P75i for which a committee headed by the navy's chief of design, vice-admiral Ashok Subhedar, has been tasked.
A defence official said the Modi government was closer to a policy in which all purchases of "strategic equipment" would be made through government-to-government deals. He cited the example of the decision to buy 36 Rafale fighter jets from France.
An official statement from the ministry said the talks between Manohar Parrikar and the visiting German minister focused on "partnering of Germany in the Make-in-India initiative in the defence sector and supply of state-of-the-art equipmentechnology".
Prime Minister Narendra Modi visited Germany last month. German chancellor Angela Merkel is slated to visit India later in the year. The German defence minister will be visiting the Western Naval Command in Mumbai tomorrow.