Sources say Germany is looking to sign a $5.2 billion deal with India on submarines

by Rupam Jain, Andreas Rinke and Krishna Kaushik

NEW DELHI/BERLIN (Reuters) – Germany will sign a $5.2 billion deal to jointly build six conventional submarines with India during a visit by Chancellor Olaf Scholz on February 25-26, according to two Indian and two German sources. Would like to

The naval project is the latest attempt by the Western military power to persuade New Delhi to reduce its dependence on Russia for military equipment.

India is struggling to replace its aging submarine fleet with 11 out of 16 conventional submarines more than 20 years old and to counter China’s growing presence in the Indian Ocean.

The Indian Navy also has two locally built nuclear-powered submarines.

Prime Minister Narendra Modi’s government wants to see India, one of the world’s biggest arms importers for decades, produce more weapons domestically in collaboration with foreign partners.

The submarine construction project, for which Thyssenkrupp Marine Systems (TKMS) is one of the two international bidders, will be discussed between the two countries during the German Chancellor’s visit to India and Berlin will endorse the OK, according to a source.

Under this agreement, a foreign manufacturer will have to partner with an Indian company to build submarines in their region.

It would also have to transfer the technology for an anaerobic propulsion system (AIP or Air Independent Propulsion in English) using fuel cells, a particularly difficult situation for most foreign companies.

French conglomerate Naval Group had withdrawn from the project on the eve of Narendra Modi’s visit to Paris in May 2022, citing its inability to meet the conditions laid down by the Indian government.

Russia’s Rosoboronexport and Spain’s Navantia Group are also out of the running, said an Indian Defense Ministry source, who wished to remain anonymous as he was not authorized to speak to the media.

German TKMS, which just signed a contract with Norway for joint construction of six submarines, and South Korean Daewoo Shipbuilding and Marine Engineering are on the way.

India’s foreign and defense ministries did not respond to requests for comment. The German government and TKMS declined to comment.

According to an Indian diplomatic source, the country has sought assurance from Germany not only of supply support but also of joint construction of submarines.

Another Indian foreign ministry official said, “Scholz was determined to reinvigorate trade and defense ties with India.”

Officials in Berlin said such a deal was likely to have backing from the German government. Although the decision is not official, the coalition government relaxed the arms export policy for India and authorized the export of a set of military equipment in early February.

A German government official said, “We would like to continue to do this.” “India is largely dependent on Russian weapons. It may not be in our interest to continue with this.”

(Reporting by Rupam Jain and Krishna Kaushik in New Delhi, Andreas Reinke in Berlin; French version Dagmarh Macos, Editing by Kate Enstringer)

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