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Indian Navy To Limit Ship Buys to Domestic Yards

Maritime Activity Reports, Inc.

May 4, 2015


The Indian Ministry of Defence has directed future warship and submarine building orders be given only to domestic shipyards. The Navy has potential orders worth more than US $50 billion over the next 10 years for ship and submarine builds, said a Defence Ministry source.

However, the $12 billion purchase of six conventional submarines with air independent propulsion, for which a request for proposals is being prepared, will still allow foreign participation in the design phase, although the subs will be built only by domestic shipyards, the MoD source added.

As state-owned shipyards have their hands full, private sector yards, which have the facilities but fewer orders, are likely to be the biggest beneficiaries under the new directive, analysts said.

"Private shipyards have not been given adequate opportunity to prove their mettle. There is no doubt that they are more modern and perhaps more efficient and given an opportunity will perhaps outperform the state-owned shipyards. It is too early to judge them as the state-owned shipyards have a five-decade lead in shipbuilding," said Anil Jai Singh, retired Indian Navy commodore.

Navy officials and defense analysts said India has the capability to build warships from the design stage, but will have to rely on imports to meet its weapon needs.

"We have enough first-rate shipyards in India to deliver the ships and submarines that the Navy and Coast Guard need. There is no case for buying from abroad at all," said Sujeet Samadda, a retired Indian Navy commodore.

MoD has asked the Navy to upgrade its design facilities so it can effectively build submarines in the future, the MoD source said.
"It is little known that the Indian Navy has its own in-house warship design organization whose capability has been refined over the years from 1960 onward. Today, the Indian Navy can design and supervise the construction of the most sophisticated warships, all done in-house. Our capability is the envy of other world-class navies," said retired Adm. Sushil Kumar, former chief of the Indian Navy.

An Indian Navy official said 17 different designs, ranging from small craft to destroyers, have been developed by the warship design organization from which more than 80 warships have been built. These include stealth frigates under the Project 17 Shivalik class, three destroyers of the Kolkata class under Project 15A, and anti-submarine warfare corvettes.

In February, the government cleared a proposal to build seven stealth frigates and six nuclear attack submarines worth $16 billion to be designed and built in India. In addition, the Navy will build 16 anti-submarine warfare craft worth $2.5 billion and 12 mine countermeasures vessels (MCMVs) for $5 billion; all of these orders will be placed with domestic yards, the Navy official said.

Last year, MoD scrapped the proposal to award the MCMV deal to Kangnam of South Korea and instead gave the order to state-owned Goa Shipyard
when it was found that the South Korean company had used defense agents in pursuing the deal, which is not allowed under Indian defense
procurement law.

Indian warship building traditionally has been plagued by delays and cost overruns, but deliveries have improved in recent years, analysts said. Delays related to imports of special steel from Russia have been eliminated because India has begun producing the steel for warship building itself.

"It is not only the Indian Navy which has the problem of delays and cost overruns," said S. Navaneetha Krishnan, a retired Indian Navy commander and naval architect. Timely decisions and delivery of material also are key for shipbuilding projects, he added.

Despite its ability to build ships and subs, India will need to import several systems, especially weapons, analysts said.

"Indigenization [in warship building] has been in the field of hull and metal work, power generation and distribution, motors and pumps, and
communication systems," said Shyam Kumar Singh, retired Indian Navy captain. "BrahMos [supersonic anti-ship cruise missile] is the only indigenous missile system. Considering all of this, my guess would be that indigenization would be around 50 percent in warship building."

According to Krishnan, the degree of indigenization is increasing ship after ship being built in India.

Birinder Singh Randhawa, a retired Navy vice admiral, said that while he favors restricting orders to domestic yards, even the homemade systems have some imported content.

"Systems and equipment supplied by Indian suppliers have imported content of varying amounts, especially in the case of weapons and sensors and propulsion systems. Hence the content imported can vary substantially. In the case of destroyers being built under Project 15-B, the propulsion system, main gun, radars and surface-to-air missile systems would have substantial imported content."

Adm. Sushil Kumar admits that shipbuilding will continue to have imported content, but said the Navy is fully capable of ship and sub design and construction.

"No Navy in the world equips its warships with exclusively indigenously developed weapon systems. This is because technology in weapon systems is rapidly changing. So there is need for the Indian Navy to also depend on certain imported systems," he said. "But the Indian Navy can integrate these imported systems because we have our own design capability. If the Indian Air Force or state-owned military aircraft manufacturer Hindustan Aeronautics Ltd. had the type of capability which the Indian Navy has developed over the past 50 years, then the need to purchase a Rafale fighter from France would have been a different story."

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