Eyeing Indian Navy’s $5 Billion Submarine Deal, Spain Offers Full Technology Transfer, Lowest Price

Defence Industry

New Delhi: Top Spanish defence official, Secretary of State for Defence Amparo Valcarce will visit India next month to hold talks with her Indian counterparts. According to sources, the six stealth and new age submarines having the latest AIP technology will be the main agenda for Valcarce during her visit to India on March 7 and 8.

State-owned defence giant Navantia is competing with Germany’s Thyssenkrupp for the Indian Navy’s $5.27 billion submarine programme – Project-75 India or P-75 (I). Navantia will be making the submarines under the government’s Make in India programme after signing a teaming agreement with Larsen and Toubro in July last year. Prior to signing the teaming agreement, Navantia and L&T signed a memorandum of understanding on April 11, 2023 in Madrid for designing its S-80-class submarines for the Navy.

Along with complete transfer of air-independent propulsion (AIP) technology, Spain has also shown willingness to offer the submarines at a much lower cost compared to another key contender, Germany’s Thyssenkrupp for the deal. Spain has also told India that they are most suitable for the project and have the most competitive price structure, which is touted to be India’s largest defence acquisition project.

According to a media report which cited an official closely linked to the ongoing talks, the talks are progressing well. “We expect positive movement on the deal post the parliamentary elections … This is not just a defence deal but a strategic move for both countries.”

During Spanish Deputy Prime Minister Teresa Ribera’s visit to India earlier this month, talks over the submarine deal did come up for discussion during her meetings with the Indian government officials. Since India will be holding its general elections in the middle of this year, the talks around the deal are likely to face some delays, the sources said.

In June 2021, the Ministry of Defence had floated a proposal to build six next-generation submarines for the Navy with the latest AIP technology enabling the submarines to remain underwater for a longer period. The six new submarines will be procured by the Indian Navy to replace its 11 diesel-electric powered submarines that have been inducted in the 1990s. Navantia has offered S-80 submarines for P-75(I) that have a displacement of 3,000 tonnes and a proven AIP system. The company also has plans to export these submarines from India to other countries in the long term. Previously, Navantia had co-designed and participated in the transfer of technology in India for the six Scorpene submarines built by Mazagon Dock Limited.