Germany will build six submarines for the Indian Navy in its largest weapons deal with the South Asian country in 42 years. It makes Germany the latest Western nation to nibble at India's vast arms import market as supplies of Russian weapons dry up.
On Wednesday, Indian shipbuilder Mazagon Dock signed a memorandum of understanding with ThyssenKrupp Marine Systems of Germany, a collaboration that German defence minister Boris Pistorius hailed as a “lighthouse project”.
The final accord on the 4.8 billion-euro deal is likely to be ready by the end of 2023, officials said.
The non-nuclear submarines will be built under Delhi's "Make in India" initiative, which is designed to reduce costly military imports by India, the world’s largest weapons buyer.
Some experts put the worth of the project to build six subs with “significant local content” for India’s navy at 7 billion euros.
German inroads
The Indian navy has 16 conventional submarines, 11 of them over 20 years old, as well as one nuclear-powered sub leased from long-time ally Russia.
A fully armed Russian-built submarine exploded and sank at its Mumbai mooring in 2013, killing 18 crew members.
India’s plans to lease another Russian nuclear vessel could be delayed beyond the planned 2025 delivery date because of the war in Ukraine.
“We have thus sent a very important signal … a milestone, one could say, for a new flagship project,” Pistorius said at the Mumbai signing ceremony, calling it a key step for “India and the Indian-German strategic partnership”.
Pistorius, the first German defence minister to visit India in eight years, argued that Russia’s war on Ukraine has had a “dramatic” impact on Germany’s defence policy.
He urged Delhi to embrace Berlin as a strategic ally like Australia and Japan, and to bolster military trade.
“We call it ‘Zeitenwende’, a decisive turning point. And right now, we are working on a law finalising Germany’s first ever national security strategy that will guide arms exports as an instrument of security policy,” he said, winding up an Asian tour.
German Chancellor Olaf Scholz, who visited Delhi in February, unveiled his Zeitenwende policy four days after Russia attacked Ukraine. It promised massive funding to ramp up capacity of the country’s under-financed armed forces.
In Mumbai, ThyssenKrupp said the submarine deal opened prospects for deeper cooperation with the Indian navy, which has nine new projects worth billions in hand as part of its plans to counter China’s clout in the Indian Ocean region.
“With this, ThyssenKrupp is proactively striving to contribute to Germany’s strategic cooperation with India,” added the conglomerate, which in 2005 acquired German shipbuilder Howaldtswerke-Deutsche Werft, HDW.
Russia sidelined
India signed a four-submarine contract with HDW in 1981, but charges of kickbacks mired the deal.
Delhi ultimately slammed the brakes on major military deals with Germany, while its arms trade with Russia grew following the Soviet Union’s breakup a decade later.
But in March, the Stockholm International Peace Research Institute (SIPRI) said Russia’s share of Indian arms imports slipped from 62 percent to 45 percent between 2017 and 2022.
The think tank said that France, which recently sold 36 Rafale jets worth 8 billion euros to India, became its second-largest hardware supplier, accounting for 29 percent of Delhi’s imports.
Nudged into third position by France, the United States notched up 11 percent of total weapons sales to India, according to SIPRI's annual Trends in International Arms Transfers report.
“Russia’s invasion of Ukraine will probably put additional constraints on Russia’s ability to export arms, as it is likely to prioritise the production of arms for its own military over those for export,” it said.
International sanctions on Russia that bottled up India’s payments in rupee, as well as the South Asian currency’s fluctuations against the American dollar, also caused supply disruptions, experts say.
Delhi continues to import deeply discounted Russian oil despite the US-led sanctions on Moscow.
