Nearing approval, 'strategic partner' policy will unlock submarine building

The missing link in a number of crucial defence procurements, especially the much-delayed Project 75I (referred to as 75-India) to build six conventional submarines for the navy, is close to being resolved.

Business Standard learns that the “strategic partner” policy has been finalised. It is currently before the defence secretary for clearance, after which it will be quickly cleared by Defence Minister Manohar Parrikar, who has made the policy a personal mission. Then it goes to the finance ministry, before final clearance by the cabinet.

The “strategic partner” policy spells out guidelines for nominating private Indian defence firms as partners of choice for building submarines, warships, fighter aircraft, helicopters, tanks, etc. Foreign vendors selling India these platforms would be required to transfer technology to the designated Indian “strategic partner”, which would manufacture the platform in India, and support it through its service life.

The “strategic partner” policy was to be a part of the Defence Procurement Policy of 2016 (DPP-2016). But reservations within the ministry over the method of identifying partner companies forced the issuance of DPP-2016 with a missing Chapter 6.

Now Chapter 6 --- the “strategic partner” policy --- is close to being cleared.

Nobody is more pleased about this than the navy, with Project 75I being held up for want of a strategic partner. The ministry has favoured a proposal to build four Project 75I submarines at Mazagon Dock Ltd, Mumbai (MDL), and the remaining two through the designated “strategic partner”.

In Delhi on Tuesday, Vice Admiral GS Pabby, the navy’s warship construction and acquisition chief, indicated that Project 75I could soon be globally tendered. 

He revealed that the delay in the “strategic partner” policy arose from “complications that needed to be sorted out”, but were now almost resolved. 

Business Standard learns the biggest hurdle was a covenant the ministry needed to provide each strategic partner, stipulating that the partner would automatically benefit from follow-on orders and other benefits. Such a requirement had been spelt out in the VK Aatre recommendations for identifying strategic partners.

However, ministry bureaucrats, eager to bind the strategic partners with contracts and covenants, were less willing to hold the ministry to responsibilities of its own.

Defence industry insiders believe the first two major contracts that the promulgation of the “strategic partner” policy would unleash are: a light fighter production line, and Project 75I. 

Pabby confirmed today that the six Project 75I vessels would incorporate indigenous AIP, based on advanced “fuel cell technology”, developed by the Defence R&D Organisation (DRDO). A submarine equipped with AIP can remain underwater for long periods, making it difficult for the enemy to detect them.

In contrast, submarines propelled by traditional diesel-electric systems (like all of India’s submarine fleet, including the Scorpenes currently being built) require to surface periodically --- usually every 48-72 hours --- to recharge batteries. A surfaced submarine is vulnerable to detection by the enemy.

The DRDO’s AIP system is being productionised by an industrial partner, Larsen & Toubro. That would provide L&T a significant advantage when the ministry selects a strategic partner for submarine building.

Project 75I is regarded as crucial for the navy’s operational credibility. Its submarine fleet is down to just 13 vessels, against the 24 regarded as essential. Six Scorpene submarines being built at MDL are running late, but should all be in service by the end of this decade.

The navy had kept open an option for DCNS --- the Scorpene’s French vendor --- to provide AIP for the last two Scorpene vessels. Today Pabby ruled out AIP for those.

Separately, Pabby declined to comment on media reports that India’s first nuclear ballistic missile submarine, INS Arihant, had been commissioned into navy in August. However, hinting at an impending announcement, he stated: “There will soon be an opportunity to talk about it”.

The Arihant has no naval operational role. It operates under the Strategic Forces Command, lurking underwater for months at a stretch, ready to fire nuclear tipped ballistic missiles at any enemy that ventured to launch a “first strike” against India.

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