Even at $3.6 billion a piece, an ohio class SSBN is nore favourably priced vis-a-vis a conventional submarine. And all this because we are buying off the submarine from a foreign vendor.
6 Scorpene, 4 U-209 and 7 Kilo class submarines later, we should definitely by now be constructing our own indigenous submarines and instead of throwing billions at foreign sales, we should be making them in-house for much less.
Well, if the government had shown some common sense in the 1980s, we would be building our own submarines today.
The Navy, in the late 1970s, was in the middle of an expansion boom, and one of the requirements highlighted was for 20 submarines. That meant 12 new submarines plus the eight Foxtrot-class boats in service. However, the Kalvari-class was deemed as too cramped, and the decision was made to go for 16 submarines, with the last four replacing the Kalvaris in the 1990s. The final plan was to procure two classes of 8 submarines each.
The Navy had five potential contenders: Russia (Kilo-class), Germany (Type 209), Sweden (Näcken- or Västergötland-class), France (Agosta-class), and the UK (Victoria-class). Cold War pressures precluded the UK, and Bhikaristan's purchase of 2 Agostas in 1979 (which had been built for South Africa) meant the French were out. That left three nations.
Of these, the Germans and the Swedish were willing to follow a 2+2+4 model. That is, the first two boats would be built in those nations (with teams from India observing the construction process), the second pair of two being built partially in India using some pre-fabricated sections and the like, and the last four being built fully in India with some imported components, with the foreign shipyard overseeing the work in an auditing capacity. Russia, on the other hand, refused to consider local production. Their offer was to have all 8 ships built in the Soviet Union, with teams from Indian shipyards visiting to observe the construction process. Oh, and the Russians called this "visiting team" paradigm as technology transfer, and increased prices, which led to it never happening. On the other gand, the German and Swedish offers had extra charges for technology transfer, but the first two boats were Essentially built at standard rates.
The Navy was in favour of going with Germany and Sweden. However, cost soon became a sticking point with the Swedes, with the government unwilling to sanction the funding. As such, the Swedes were out, and the Russians were in. Then, the government cut funding even further to send money to the IAF (which would eventually culminate in the debacle of small-scale procurement of both the MiG-29 and Mirage 2000, which threw local production out of the window). As a result, the German contract was cut down to 4 boats plus 2 options.
In the late 1980s, while the second pair of Type 209 boats were taking shape, the government claimed that TKMS had paid bribes for the Type 209's selection, and before a formal enquiry could be finished, cancelled the 2 Type 209 options. That left the Navy with 12 new SSKs, which was insufficient when you consider that the Foxtrots would be leaving service in the 1990s and 2000s.
With the financial crisis of the early 1990s coming on, it was finally agreed in 1994 to simply buy two more Kilo-class boats from Russia, which was selling them on the cheap to raise money for post-Soviet Russia.
Essentially, all that boils down to the fact that the Navy would have got 8-12 locally built submarines had politics not intervened. It eventually left them with 2 partially-locally-built submarines. We never built the Kilo-class.
Oh, and if all that wasn't enough, at that point, the Germans and Swedes were also willing to transfer the maintenance skills for MLUs of these boats to India. Russia only agreed at the last moment because the others had also agreed, and without it, their chances on an already weak offer would be even lower.
