Submarines Galore For The Indian Navy

An IDC Analysis


New Delhi, 13 September 2005

Some months ago we had informed of media reports in the Russian and Western press that India was to get two Akula class submarines from Russia on lease and very few Indians get involved in the negotiations as nuclear submarine matters are known only to a few and some in the ATV Directorate. Now Fianancial Express Defence Reporter has made this news public in the Indian media, though Government has not confirmed it and is unlikely to do so. The same happened for the INS Chakra. However the report seems plausible and we wonder how the US Congress will view the deal as it debates nuclear help to India. President Bush now has problems convincing his Republican members that his policies towards India will help USA also. President Bush is beset with Katrina problems and an IL 76 with Indian aid for New Orleans was due in on 11th September, though President Bush had stated that financial help would be preferred. The media report on the Akulas is posted below.

The French media too had reported via Reuters that the 6 Scorpene submarine contract was concluded and the original estimate was $3 billion but another Indian Defence media reported that the price was renegotiated with the French Armaris and had come down to $1.5 billion. If this is true then this will put the last Defence Minister and his team of the BJP in poor light and Indians will know there has been hanky panky or that defence deals with India have such huge leeway. The Bofors and such deals proved it.

Any way the CNS had stated the deal is imminent and will be happy it has been signed during his term. The media item is tabled. From a drought of submarines, the Indian Navy of the coming years will have submarines galore if the ATV also commissions in 2008, and we wishe the Navy's underwater warriors all the best.

Financial Express Report On Akulas

India is all set to get two Akula class third generation multipurpose submarines on lease — with the option to buy them — from Russia by end of this year.

According to sources, the recent construction of a training centre for the Indian defence officers in Sosnovy Bor, west of St Petersburg, confirms Russia’s intentions to lease nuclear submarines to India.

“The international centre will start training 300 Indian Naval officers by mid-September,” officials said. This constitutes 4 Akula crews.

This centre also trains Russian Naval officers and houses working nuclear reactors of the type found on nuclear submarines. These reactors are used to test nuclear fuel and other technologies applicable to nuclear submarine reactors.

While defence ministry is tight-lipped about the training of naval submariners, experts at PIR-Centre, Moscow, told FE, “It is quite possible that the centre will be training Indian experts and navy officers in the field not only from the point of view of official leasing of submarines with nuclear reactors, but also from the point of developing such a submarine by Indians themselves.”

Sources said such training in Sosnovy Bor was a testament to the notion that Russia has not given up on its plans of leasing nuclear submarines.

It may be recalled that defence minister Pranab Mukherjee had said that negotiations about obtaining a Russian nuclear submarine were underway.

The two Akulas, one 70-85% complete and the other 40-60% complete, will cost India some $400m. The leasing costs would amount to some $25m a year. The construction of both submarines and training of the crews could run, according to experts, to around $2 billion.

Reuters Report in Indian Media

India has ordered six submarines developed by a group of French and Spanish companies in a deal worth 2.4 billion euros ($3.01 billion), newspaper La Tribune reported on its web site on Tuesday.

The order for Scorpene submarines will generate revenue of 1.2 billion euros for Armaris, a unit of French shipbuilder DCN and defence electronics group Thales, the paper said.

Officials at Thales were not immediately available for comment, but a DCN spokeswoman cautioned, "The Indian government had not notified Armaris of its approval."

The vessels are being developed in cooperation with Izar of Spain.

Hindustan Times on Scorpene Submarines and Nuclear Supplies

French Nuclear Kiss For India

Vir Sanghvi

Paris, September 12, 2005

India and France on Monday jointly announced the broad contours of an arrangement that will result in the resumption of French nuclear supplies to India.

The deal, similar to the one agreed to by India and the US and India and the UK, was hinted at in the Joint Statement issued by Manmohan Singh and Jacques Chirac. The language of the statement is deliberately vague: “France acknowledges the need for full international civilian nuclear cooperation with India and will work towards this objective.” But official sources said that both sides had agreed to a resumption of nuclear supplies.

Manmohan Singh met President Chirac for an hour and a half at the Elysee Palace before both men went in for an official lunch. The two had met recently at Gleneagles during the G8 conference and the discussions were friendly, a sign of France’s stated desire to improve relations with India.

Chirac has just recovered from a stroke and Dr Singh was the first foreign visitor he met after his illness. Welcoming the Prime Minister, Chirac spoke of his happiness at India’s decision to buy 43 Airbus aircraft and six Scorpene submarines.

The price of the submarines has been the subject of some dispute, with the Indians asking the French to waive the cost escalation clause. But nobody is willing to officially state what came of the financial negotiations. At a press briefing addressed by the Foreign Secretary, but attended by half the PMO and nearly everybody else who wanted to appear on TV, there was a firm refusal to divulge any figures.

Chirac restated France’s support for India’s bid for a permanent Security Council seat and accepted Manmohan Singh’s invitation to visit India, along with a French business delegation, on February 20, 2006.

For his part, Manmohan Singh, who met French CEOs separately, restated his view that India's liberalisation process was irreversible and said: "I am here to convince the French businessmen community that India is going to be a competitive destination for foreign investment."

Chirac explained France's proposal for a new global tax on all international travel, the proceeds of which would be used to fight HIV/AIDS. Dr Singh promised him that India would go along with this initiative.

Dr Singh is scheduled to meet French intellectuals on Tuesday before flying on to New York for the UN General Assembly.

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