Even as tensions simmered along the Line of Control (LoC) following the Balakot airstrikes, a battle of a very different kind was developing in the deep waters of the Arabian Sea. Within hours of the strike, a flotilla of Indian warships, flanked by INS Kalvari – the Navy’s most modern stealth submarine, took to the high seas. The flotilla was tasked with one crucial mission – to track down a modern submarine of the Pakistani Navy that had mysteriously disappeared since the air strikes by India. The search for the submarine, which according to reports, lasted for weeks, concluded after the submarine was tracked down sailing along Pakistan’s western sector.

Though the Navy tasted success in tracking the enemy combatant, it still opened grounds for questioning it’s capabilities in hunting down submersible platforms. While the Navy did have adequate surface and aerial combatants to hunt down the submarine, it lacked adequate submersible assets (submarines) to address the threat. The Navy has for years been left severely short of these platforms, which are a crucial means to attain naval dominance in its operational theatres.

To address these shortfalls, the Navy since 1999, has been batting for operating at least 30 submarines by 2030 to maintain its naval supremacy in the IOR (Indian Ocean Region). This ambitious plan of the Navy has, however, been left in a limbo owing to failures with successive procurement programs. With only 16 submarines now at its disposal, the Navy has been left grappling to maintain its footing in the region.

Cornerstone to this ambitious modernisation program of the Navy is its P-75I (Program – 75 India) which was drafted almost a decade back for acquiring at least six diesel-electric ultra-modern stealth submarines. Missing acquisition roadmaps and policies had meant that the crucial program had been in abyss for years. Much to the relief of the Navy, this alarming trend has, however, reversed over the past few years as the Government is working towards fast tracking this crucial acquisition program.

Notification of the Strategic Partnership (SP) model, under which the acquisition program will be processed, in May, 2017 and the introduction of the Request For Information (RFI) for the program itself in July, 2017 had set tone for the multi-billion dollar high stakes acquisition program.

After almost two year since the introduction of the RFI the Government has now officially set the ball rolling for the acquisition program by issuing the Expression of Interest (EoI) on 20 June 2019 for shortlisting potential Indian Strategic Partners (SP) for the construction of the six submarines. The Ministry of Defence (MoD) is also reviewing response to the RFI from Global Original Equipment Manufacturer (OEMs) and the EoI for the OEMs is expected to be issued by September, according to sources privy to the acquisition program.

Issuance of the EoI marks a major milestone in the INR 45,000 crore project which was floated as a follow up to the P-75 (Program-75). This also is a significant boost to the Government’s much talked ‘Make in India’ initiative as this would provide a major boost to the indigenous design and construction capability of submarines in India. This move will also be equipping the country with the latest submarine design and technologies as part of the project.

Following responses to the EoI, the MoD will then begin evaluation of the shipyards to be selected as Strategic Partners for the lucrative program. The stringent evaluation process itself will be carried out in accordance to the guidelines laid down under Chapter – VII of the MoD’s Defence Procurement Program (DPP) – 2016 manual.

Also dubbed the Strategic Partnership (SP) model, the guidelines mandate that a single shipyard be designated the SP partner for the program. This selected shipyard will then work with the down selected OEM for setting up a production line in India and then manufacture at least six submarines.

The evaluation process for the deletion of the shipyard would be based on capability of the shipyard in the process of integration of system of systems and expertise in shipbuilding domain. Besides these criteria, the MoD would also be considering the financial strength and track record of the shipyard in executing prior projects.

With a confirmed order for six submarines and with an option for buying another six platforms, the P-75I promises to be one of the biggest defence deals of the decade. This lucrative proposition has meant that local shipyards, both state-owned and private, are going all out to bag this multi-billion dollar deal. State-owned Mazagon Dock Shipbuilders Limited (MDL) and Hindustan Shipyard Limited (HSL) lead the fray. From the private sector, Larsen and Toubro (L&T) is set to be the sole bidder. These shipyards are expected to respond to the EoI by October, 2019.

Sources privy to the acquisition program quip that the race for nomination as the strategic partner for P-75I will eventually narrow down between MDL and L&T. While the Government’s steadfast decision to reserve HSL for construction and upkeep of strategic platforms (nuclear submarines) threatens to pip it out of the race, poor financials and unreliable track record is expected to threaten any bleak changes of Reliance’s Naval and Engineering Limited (RNEL).

Race between MDL & L&T – An unfair fight amongst the giants?

When the Government drafted the SP policy, the core strategy of it was to empower the Indian industry with capabilities to help the country realise its requirements for cutting-edge defence technology. Besides the SP Model was also expected to create a level playing field for the private sector in defence manufacturing. The prologue of the draft manual itself had clearly indicated that the Government was very much inclined towards keeping out state-owned organisations from acquisition programs processed under the SP policy. Even the Dhirendra Singh Committee, which drafted the SP Policy, was of the view that this move would rival the unchallenged monopoly of state-owned Defence Public Sector Undertaking (DPSUs). It had also noted that such a move would greatly help in enhancing the country’s defence manufacturing capabilities by energising the private sector.

While the private sector was upbeat about the entire projects promised by the SP policy, it received a jolt when the Government last year, prematurely declared that DPSUs would be part of all acquisition programs on a nomination basis. This move by the Government meant that the private sector, which had a mere 6-7% share of defence contracts, had to battle it out with DPSUs, who had operated serving forces for decades.

The A-26 Diesel-Electric Submarine. Source – Saab.com

Under the Program-75 India itself, L&T will now rival Mumbai-based MDL shipyard, which has been an active partner of the Indian Navy since 1965 in construction of both surface and under-water platforms. MDL, under the P-75 and prior Type-209 acquisition program, has developed unmatched capabilities in design and construction of underwater platforms. It also has enjoyed an unquestioned monopoly in the construction of submarines in the Indian market.

With L&T’s Kattupalli shipyard manufacturing the hull for India’s secretive ATV Project, under which the country received its first indigenously built nuclear propelled ballistic submarine, the company has enjoyed a unique capability in the country. The company through the course of this program had developed in-house capabilities for designing and developing critical equipment and systems.

But the inclusion of MDL on a nomination basis has now virtually delivered a death kneel to the prospects of L&T. Apart from the technical advantages that MDL enjoys, the state-run shipyard also has a strong financial book, virtue of the large order placed up on it by the Indian Navy. The only factor in favour of L&T currently is its proven and reliable track record.

With the crucial program now gaining traction, it is imperative that the Government clears any future roadblocks that threaten to hamper the pace of the program.