Germany and India are closing in on a deal to build diesel submarines for Indian waters as Russia’s prolonged war in Ukraine has pushed the Indian government to expand its sources of military hardware beyond its top supplier, according to a report by Bloomberg. Thyssenkrupp AG’s marine arm and India’s Mazagon Dock Shipbuilders Limited are likely to jointly bid for an estimated $5.2 billion project to build six submarines for the Indian navy, said the report.
The preliminary agreement or the memorandum of understanding will be signed in the presence of Defense Minister Boris Pistorius who arrived in New Delhi on June 5 for a two-day visit, according to German and Indian officials.
Also Read: Mazagon Dock share price hits new 52-week high, rises over 7%; Here’s why
His role is to “support and assist” the negotiations between German executives traveling with him and their Indian counterparts, the report added. “This would be a big and important contract not only for German industry but also for India and the Indian-German strategic partnership,” Pistorius said.
The Kiel-based defense manufacturing giant had shown no interest in jointly manufacturing submarines in India when the tender was announced two years ago, said the report.
However, with the Russia-Ukraine war in its second year and China moving in lockstep with Russia, the West and in particular Germany, are placing their bets on India becoming a hurdle against Beijing’s growing diplomatic and military assertiveness.
For the submarines, India has identified Mazagon Dock Shipbuilders and infrastructure gianat Larsen & Toubro to tie up with foreign defense majors to build the diesel attack submarines. A key target for a partnership had been Thyssenkrupp Marine Systems, which is one of two submarine manufacturers globally to have air independent propulsion — a technology that helps conventional submarines stay underwater for longer.
On June 5, shares of Mazagon Dock Shipbuilders touched a new 52-week high and jumped over seven per cent during the session. The share price opened at ₹1,019 apiece on BSE, and touched a intraday high of ₹1,062 and low of ₹1,008. The shipbuilding company’s shares settled 4.03 per cent higher at ₹1,026.30 apiece on the BSE.
India and China emerged as the two major Southeast nations that bought large quantities of discounted crude oil from Russia. But, even after buying cheap crude despite reservations from the West, India continued to engage with the US and its allies.
India has used a lingering border dispute with China to carry on buying weapons from Moscow – its biggest supplier of military hardware though deliveries have stalled as Russia and India struggle to find a payment mechanism that does not violate US sanctions.
Submarines are a key need for India due to its aging weapons and navy fleet. The Indian navy needs a minimum of 24 conventional submarines to effectively patrol the Indian Ocean, but currently only has 16. Apart from the six recently bult vessels, the remaining ones from the fleet are more than 30 years old and likely to be decommissioned in years to come, said Bloomberg.
India, which is part of the so-called Quad grouping that includes Japan, US and Australia, has been pushing for these countries and European allies to share technology to build submarines. However there has been a general reluctance to pass on technology given India’s proximity to Russia.
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Updated: 06 Jun 2023, 06:14 PM IST