India Import Behavior

Capabilities | Import | Export

In 1947, the Indian Navy first expressed its interest in acquiring submarines. A shortage of fiscal and human resources, however, led to a shift in priorities that prevented any procurement at that time. Furthermore, as submarines were then perceived as offensive weapons, the Indian Navy was also unable to garner significant political support either within India or from its main supplier of naval equipment, Great Britain, for submarine procurement.

Yet China acquired submarines in the following decade. Therefore, after the 1962 border conflict between the two countries, the Indian government decided to establish a submarine arm and approached the United States, Great Britain, and the Soviet Union for possible assistance. By 1964, it had become clear that the United States was not interested in providing assistance in this area. The British government, for its part, was unwilling to extend favorable credit terms for the acquisition of a new Oberon-class vessel. Instead, a significantly older T-class unit was offered, which had little service-life remaining. Thus, the offer made by the Soviet Union in early 1964 for four fairly new Foxtrot-class (Project 641) units was viewed in a favorable light by India. However, only after an additional visit to Great Britain failed did India order the four vessels from the Soviet Union in 1965, which were followed by an order for another four units in 1971.[1]

Sindhughosh (Kilo) class SSK control room.
Source: http://www.bharat-rakshak.com

As India became increasingly interested in technology transfer and local production, the unwillingness of the Soviet Union to pursue such cooperation led the Indians back to Western partners.[2] In 1981, India selected a proposal from Howaldtswerke-Deutsche Werft (HDW) over rival offers from France's DCN, Sweden's Kockums, the Netherland's Nevesbu, and Vickers in the United Kingdom to deliver four Shishumar-class (Type 209/1500) diesel boats with an option for an additional two units. As part of the deal, the first two units were to be made in Germany and the second pair to be constructed locally from material kits.[1,3,4,5] In 1984, India decided to execute its option for two further vessels, which were to be built locally. However, allegations of corruption and a lack of cooperation from HDW in the resulting investigation led India to cease its relationship with the German shipyard in 1988.[6,7]

Coincident with the procurement of the Shishumar class, India decided to acquire six Kilo-class (Project 877) units from the Soviet Union in 1983. The protracted construction process of the Shishumar class, as a result of welding problems, initially led India to increase its order for Kilo-class vessels by four, an order later decreased to just two additional units.[8] However, in 1997, India ordered two further Kilo-class boats, bringing the total to 10 vessels of this class.

After the corruption debacle concerning the Shishumar class, a resumption of relations with HDW was twice discussed, yet never taken up.[8] Plans for a locally redesigned Type 209/1500 vessel with most critical parts produced in India were announced on multiple occasions, but never came to fruition.[4,9,10] The problem has been attributed by some analysts to difficulties with the missile capability of the German boats.[11] However, France's DCN was able to break into the Indian submarine market in late 1999, signing a memorandum of understanding with India on the local construction of six Scorpène-class vessels in 2001.[12,13] A corresponding contract with an option for an additional six vessels was drawn up in early 2004, after the Central Vigilance Commission examined the pertaining documents. This procedure was introduced after previous allegations of corruption in significant defense contracts.[6] Nevertheless, there have been allegations of irregularities associated with the contract, which was finally signed on October 6, 2005.[14] All of the units are to be co-produced at Mazagon Docks Ltd. (MDL).[7,14].

As mentioned earlier, India has been interested in establishing a second production line as well, presumably to minimize its dependency on any one exporter. According to official Indian sources, there have been negotiations in this regard with Russia on a version of the Amur-class (Project 677) submarine.[6,11,13] While Russia has not engaged in the licensed production of its submarines in the past, it has successfully cooperated in the development of other defense equipment, notably the BrahMos PJ-10 cruise missile. It remains to be seen whether India will be able to negotiate this extent of cooperation and technology transfer from Russia on submarines as well.

Shishumar SSK.
Source: http://www.bharat-rakshak.com

Mazagon Docks Ltd. (MDL)
State-owned MDL was selected by the Indian government as a site for the construction of the Shishumar-class vessels. The 1981 contract with HDW included the training of specialists in the design and construction of submarines.[4,8] After the termination of the HDW contract, MDL's submarine-building capacities remained unused for years, as the Kilo-class submarines were produced in the Soviet Union and later Russia.[4,6]

Given its policy of "self-reliance" and acknowledging its deficiencies in submarine-design capabilities, India has continued to pursue license production to meet its procurement targets. After having experienced some welding difficulties in the assembly of the German-designed boats, India has witnessed as its neighbor Pakistan has produced French submarines locally, albeit with considerable delays.[15] This capability development on the Pakistani side is likely to have added further impetus for India to reacquire a local construction capacity.

Renewed emphasis was put on licensed production, but with greater design and development input by India.[16] This increased involvement is deemed necessary, especially in high-technology areas, in order to meet India's policy of "self-reliance." The policy advocates the development of indigenous capabilities, but calls for direct purchases to fulfill immediate procurement needs.[17]

In addition to pursuing joint design and development projects with France and Russia on submarines and other weapons systems, India has been slowly tapping into another major source of investment for its defense industry: its private sector.[12,18] In the past, the defense industry had been closed to private interests. However, India recently allowed the acquisition of up to 100% of the shares in defense companies by private companies and foreign direct investment of up to 26%.[17] By opening its defense sector to private and foreign investment, India plans to become globally competitive and "self-reliant" in defense procurement.

The private Indian company Larsen and Toubro (L&T) has reportedly made inroads in becoming a partner of MDL in the construction of submarines.[16,13] A senior L&T official stated that the company would be part of the "overall submarine program," which would be a joint effort between the two companies. According to an Indian source, L&T has even received approval to produce the second line of Indian submarines.[19] According to one source, the company has already been involved in the production of the reactor vessel for the ATV.[16]

In order to attract investors, Indian officials have expressed a pronounced interest in exporting weapons systems.[17,20,21] It is likely that this goal will be pursued in the submarine sector as well. While the Indian market for submarines itself is not negligible, the Asian naval market has exhibited strong growth rates in the recent past. Its expansion was halted briefly by the economic crisis of the late 1990s, but procurement plans can be expected to be reinstated in the near future, if that has not already been done by certain countries. Therefore, it would be economically imprudent not to utilize India's geographic position and political ties to market jointly developed vessels in the future.

Cooperation similar to that between HDW, Turkey's Gölcük Shipyard, and the Turkish Naval Forces is possible. In the late 1990s, these three parties joined efforts in a bid for the Malaysian Navy's submarine acquisition program. The Turkish Navy offered used submarines for training purposes, while new vessels were to be produced by HDW and the Gölcük Shipyard.[22] Another possibility is that Indian yards will refit boats for other navies, as South Korea overhauled Indonesian Type 209/1200 units. In any event, it is not likely that India will repeat its earlier mistake and allow its capabilities to lay idle. Instead, it should be expected that the technology transfers and commercial relationships resulting from this and future procurement decisions will allow India to meet its own defense needs over time. Whether this will be in conjunction with foreign companies or solely with domestic private investment remains to be seen.

Sources:
[1] G.M. Hiranan, "The submarine arm: developments until 1965," Transition to Triumph: the History of the Indian Navy 1965-1975, Indian Navy Website, http://indiannavy.nic.in/Tr2Trmph/start.hmt.
[2] Andrey Frolov, "India's path toward having a nuclear powered submarine fleet," Yadernyy Kontrol, May 22, 2003, pp. 101-120; in "Russia: India's path toward having a nuclear powered submarine fleet," FBIS Document CEP20031128000001.
[3] A.D. Baker, Combat Fleets of the World, pp. 289-295.
[4] "Chapter 5. The Indian Navy and Naval Programmes," Indian Defence and Security - Industry, Forces and Future Trends online edition, July 2000, http://www.janes.com.
[5] Rahul Bedi and Nick Brown, "India Sets Seal on Scorpene Submarine Contract" Jane's Navy International online edition, http://jdw.janes.com, November 1, 2005.
[6] Ranjit Kumar, "Central Vigilance Commission's Green Signal to Scorpion Submarine," Navbharat Times, October 6, 2003; in "Report: Way Cleared for French Submarine Scorpion to be Manufactured in India," FBIS Document SAP20031006000034.
[7] "Mazagon Dock to build six Scorpene submarines," India Defence Consultants Website, January 26, 2003, http://www.indiadefence.com.
[8] Stephen Saunders, Jane's Fighting Ships 2002-2003 (Coulsdon: Jane's Information Group, 2003) p. 300.
[9] "Procurement, India," Jane's Sentinel Security Assessment - South Asia online edition, August 15, 2003, http://jssa.janes.com.
[10] "Procurement, India," Jane's Sentinel Security Assessment - South Asia - Update 5 online edition, May 2, 2000, http://jssa.janes.com.
[11] Dinesh Kumar, Times of India online edition, October 6, 2000; in "Indian Navy plans to equip submarines with missiles," FBIS Document SAP20001006000008.
[12] Rahul Bedi, "France, India enhance relations," Jane’s Defence Weekly online edition, http://jdw.janes.com, July 11, 2001.
[13] Rahul Bedi, "India launches submarine-building programme," Jane's Defence Weekly online edition, http://jdw.janes.com, February 27, 2002.
[14] James Murphy, "India's defence minister denies extra was paid in Scorpene deal," Jane's Defence Industry online edition, March 21, 2006, http://jdw.janes.com.
[15] "Khalid (Agosta 90B) Class (SSK)," Jane's Fighting Ships online edition, http://jfs.janes.com.
[16] Ranjit B. Rai, "Indian Navy in the 21st century," Naval Forces, 2003, Vol. 24, No. 6; in ProQuest Information and Learning Company, http://proquest.umi.com/pqdweb.
[17] Deba R. Mohanty, "Changing Times? India's Defence Industry in the 21st Century," Bonn International Center for Conversion Website, http://www.bicc.de, Paper 36, 2004.
[18] Rajat Pandit, "India, Russia agree on joint defense production," Times of India online edition, http://timesofindia.in, 5 June 2001; in "India, Russia decide to undertake joint production in defense sector," FBIS Document SAP20010605000001.
[19] "First Indian private sector submarine builder," Defense World Website, http://www.idunno.in, February 3, 2004; in "India: Larsen & Toubro reportedly 'first' private firm to manufacture submarines," FBIS Document SAP20040203000043.
[20] George Fernandes, "Tapping the potential of the Indian defense industry," Military Technology, February 2004, Vol. 28, No. 2, pp. 11-13; in ProQuest Information and Learning Company, http://proquest.umi.com/pqdweb.
[21] "India to acquire latest technologies for defence: Uma Pillai," Defexpo 2004, February 5, 2004; in "India to acquire latest technologies for defence: Uma Pillai," Defense Aerospace Website, http://www.defense-aerospace.com.
[22] Roberto Godoy, O Estado de Sao Paulo online edition, June 12, 2002; in "Brazilian firm said to have furnished Indian submarine with data commutation system," FBIS Document LAP20020612000080.

This material is produced independently for NTI by the James Martin Center for Nonproliferation Studies at the Monterey Institute of International Studies and does not necessarily reflect the opinions of and has not been independently verified by NTI or its directors, officers, employees, agents. Copyright © 2007 by MIIS.