L&T-Navantia out, Mazagon-Thyssenkrupp likely to land Rs 70,000-crore submarine deal

L&T and Navantia failed to meet the technical requirements of a proven air-independent propulsion (AIP) system — a next-generation submarine technology — said the sources. However, they have 45 days to file objections.

The Navy is looking for conventional submarines that can stay underwater for up to three weeks. The budget, however, has ballooned from the initial Rs 43,000-crore estimate.

If the contract is signed, the first submarine is expected to be delivered by 2032, seven years from the date of signing, sources said. The deal is taking place under the Defence Ministry acquisition project named Project 75 (India).

In a letter to the National Stock Exchange on Thursday, MDL said: “P75(I)- MDL confirms that the commercial bid submitted by MDL has been opened by the Ministry of Defence for further processing. With respect to the 3 additional submarines of Scorpene class under project 75, as earlier informed, commercial negotiations with respect to the project are in process.”

Sources said the Navy’s field trial evaluation report, submitted last year, validated the technical compliance of the Thyssenkrupp submarine. Despite objections from L&T-Navantia, a Defence Ministry technical committee — comprising a Rear Admiral, an Air Commodore and a Brigadier — confirmed that due process had been followed. Consequently, the L&T-Navantia bid was deemed non-compliant.

The Navy’s requirement — submarines capable of 3,000-tonne displacement — posed a challenge for both bidders. While Thyssenkrupp’s AIP system, installed in more than 60 Type-214 submarines, required scaling up, it was deemed acceptable due to its track record, it is learnt.

Navantia, on the other hand, relied on an AIP system integrated into its S-80 class submarine that is set for commissioning in 2026. This was the first time the Spanish state-run defence company was attempting to export a submarine to another country.

Project 75 (India), the military acquisition project of the Defence Ministry, employs a strategic partnership model where Indian shipyards collaborate with foreign original equipment manufacturers to transfer technology and build submarines in India. The project mandates an increase in indigenous content in the submarines from 45 per cent in the first to 60 per cent in the sixth. This aligns with India’s Make in India push for domestic defence manufacturing.