India defence deal for French submarines
This is a discussion on India defence deal for French submarines within the Investment forums, part of the Financial Services category; India Thursday signed its largest ever defence deal to acquire technology from France to build six sophisticated submarines, with both ...
- 09-07-2010, 05:46 PM #1Unregistered Guest
India defence deal for French submarines
India Thursday signed its largest ever defence deal to acquire technology from France to build six sophisticated submarines, with both sides describing it as an important step forward in their strategic partnership.
Several contracts related to the deal, worth about $3.5 billion, were signed at the defence ministry here, including a technical arrangement inked by representatives of the Indian and French governments to guarantee the "unhindered supply" of equipment and services.
"Today is a day of great success for the navy," said Indian Navy chief Admiral Arun Prakash, noting the new Scorpene submarines would help his force arrest its declining submarine force levels.
"Tonight marks a very important chapter in the strategic cooperation between India and France," said French ambassador Dominique Girard, adding that the deal would strengthen Indo-French defence ties and strategic partnership.
The acquisition of the Scorpenes was also the first big ticket defence deal to be inked by the United Progressive Alliance (UPA) government that came to power last year.
After years of being buffeted by allegations of kickbacks in major defence deals, the defence ministry inked two integrity pacts with Armaris, the makers of the Scorpene, and MBDA, which will supply Exocet missiles for the submarines.
The integrity pact, invoked for the first time by the defence ministry, will ensure "avoidance of all forms of corruption by ensuring free, fair, transparent and unprejudiced dealings, prior to, during and subsequent to the currency of the contract".
Three contracts were signed between Armaris, MBDA and India's state-run Mazagon Dockyards in Mumbai for the transfer of technology and supply of combat systems and missiles.
Armaris will supply technology and expertise for the six submarines to be built at Mazagon, whose submarine-building facility has not been operational for over 11 years.
The first submarine will be delivered 90 months from the signing of the contract. The others will be delivered at yearly intervals.
The Indian Navy will revive the submarine building line Mazagon that was earlier used to build four submarines with technology supplied by Germany's HDW.
The Scorpene deal was inked after four years of protracted negotiations. Though the previous Bharatiya Janata Party (BJP)-led government had given "in principle" clearance for the deal, the Congress-led UPA objected to certain penalties that would kick in due to delays in implementing it.
Thomas Mathew, joint secretary (acquisitions) in the defence ministry, said there were no penalty clauses after the deal was re-negotiated and India had obtained the best possible price for the submarines.
But Admiral Prakash warned the new Scorpene submarines, which are capable of firing missiles, would be inducted into the navy only after the turn of the decade, when the force would begin decommissioning its Russian-made submarines.
Pointing out that the government had cleared the navy's 30-year plan to build a fleet of 24 submarines, Prakash said his force would still be short of some eight submarines by the time the Scorpenes were inducted.
He said the navy would have to make innovative use of its submarines to overcome this shortfall.
The Indian Navy currently operates some 16 submarines, including four German-designed HDW vessels and 10 Russian-made Kilo-class submarines.
A decision on whether to fit the "air independent propulsion" system - a technology that allows submarines to remain underwater for longer periods of time - to the Scorpenes would be taken later, Prakash said.
"This is a new system that is being proved and we have decided to wait a little while to see if we need it," he said.
India has become the third country after Chile and Malaysia to acquire the Scorpene submarines.
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