Originally Budgeted at ₹40,000 Crore, India's P-75(I) Subs Deal Now Estimated to Cost ₹70,000 Crore Amid Tech Upgrades and Delays

The Indian Navy's Project 75I (P-75I), initially estimated to cost ₹40,000 crore ($4.89 billion) in 2022, has seen its projected expenditure surge to a staggering ₹70,000 crore ($8.55 billion), according to recent reports.

This ambitious program seeks to bolster India's underwater defense capabilities by procuring six advanced diesel-electric submarines equipped with air-independent propulsion (AIP) systems.

The substantial rise in the projected budget has ignited concerns and discussions regarding the fiscal management of such critical defense projects. P-75I is deemed vital for modernizing the Indian Navy's submarine fleet, addressing aging vessels, and maintaining a strategic edge in the region's naval landscape.

Several factors contribute to this significant cost escalation. The incorporation of cutting-edge technologies, including AIP systems for extended underwater endurance, has naturally driven up expenses.

Additionally, economic factors such as inflation and the depreciation of the Indian Rupee against the US dollar have added to the financial burden.

Delays in project implementation have further exacerbated the cost overruns. Extended labor costs, sustained infrastructure maintenance, and the need to integrate updated technologies to meet evolving standards have all contributed to the increased expenditure.

The global rise in raw material and specialized component costs for defense manufacturing has also impacted the overall project budget.

Furthermore, Project 75I emphasizes technology transfer for local manufacturing. Establishing new facilities, providing training, and ensuring adherence to international standards have added to the financial outlay.

While the Indian Ministry of Defence has yet to issue an official statement on this cost escalation, such increases are not unusual in defence procurement. Initial estimates often fail to encompass all potential challenges and contingencies. This situation underscores the complexities of managing large-scale defence projects within a dynamic economic and geopolitical environment.

 

[Somebody]

What other options do we have? It is almost like a single-vendor situation. Hope MDL absorbs the tech, unlike with the Scorpenes.

 

[SK]

It's still an option for Indian-Govt to cancel Project P-75I & instead invest in:-
(1) Additional 3 to 9 Kalvari-SSKs with DRDO's AIP system
(2) Project P-76 => Indigenous design & develop SSKs in a Displacement range of 3k to 5k tonnes with DRDO's AIP system
(3) Indigenous design & develop at least 12 to 24 MCMVs

 

[Anant]

What nonsense is this? P-75I was estimated to cost some Rs. 50,000 crore back in 2010. The DAC approval in 2014 was for Rs. 55,000 crore. In 2019, the project was cleared again for a cost of some Rs. 40,000 crore, but it was accepted even back then that this figure did not include ToT costs and the like.

The cost wasn't estimated at Rs. 40,000 crore in 2022. Heck, you couldn't get six submarines imported for that much in 2022 unless you were going for Chinese or Russian boats.

 

[WarTech]

What other options do we have? It is almost like a single-vendor situation. Hope MDL absorbs the tech, unlike with the Scorpenes.

Not gonna happen with MDL. Also, when you wait for nearly 10 years to complete the acquisition, what do you think will happen? Prices will increase. Our bureaucracy is extremely slow. And good subs aren't cheap. You can buy cheap Chinese subs or old Russian ones.

 

[Anant]

It's still an option for Indian-Govt to cancel Project P-75I & instead invest in:-
(1) Additional 3 to 9 Kalvari-SSKs with DRDO's AIP system
(2) Project P-76 => Indigenous design & develop SSKs in a Displacement range of 3k to 5k tonnes with DRDO's AIP system
(3) Indigenous design & develop at least 12 to 24 MCMVs

P-76 is already being worked on, and funding is available for the same. P-75I is a necessity from the perspective of having a more diversified range of submarines that we can then absorb learnings from for P-76.

Oh, and as for the MCMV project, it is also in the works, with plans to acquire 12 MCMVs of the Franco-Dutch-Belgian City-class MCMV mothership design. An indigenous design isn't available as we haven't worked out a lot of the tech for those yet.

 

[MANIVANNAN N]

8 billion too high. But navy always spending huge.

 

[WarTech]

8 billion too high. But navy always spending huge.

Brother, ships are huge, and don't cost as same as peanuts.

 

[MANIVANNAN N]

Local production of a nuke sub with 95% local content gives the local industry a huge boost. If you give it to Germany, their industry will benefit. Which one do you prefer, sir?

 

[beencensured]

Local production of a nuke sub with 95% local content gives the local industry a huge boost. If you give it to Germany, their industry will benefit. Which one do you prefer, sir?

The problem in these forums is the paid lobbyists are too many and ignorant. We already have Germany's Foxtrot class, Russia's Kilo class, and the French Scorpene class. Why more hand-holding exercises are beyond anything rational, especially with OEMs unwilling to part with the technology they use, but only willing to give experimental designs, is a valid question. Is Germany our ally? Why trust them when India has all the hallmarks of a superpower? Why not invest in Indian scientists and engineers instead of foreigners and curtail the brain drain and develop the country?

 

[Surendra Barsode]

Capex for Navy per se is not the issue but why is Scorpene technology not being used to develop a newer types of submarines with DRDO AIP system? Why do we need to start afresh? After all, India designs its own nuclear submarines!!

 

[Sandeep]

Capex for Navy per se is not the issue but why is Scorpene technology not being used to develop a newer types of submarines with DRDO AIP system? Why do we need to start afresh? After all, India designs its own nuclear submarines!!

That technology is over 20 years old. Maybe a few technology upgrade but nothing substantial.

 

[Sandeep]

This project will cost slightly more than 2022 as it’s going to increase. The navy has wasted a lot of time in tender mistakes, re tendering, negotiating and spending too long in assessing the submarine on paper and in life.

No matter what we have to pay the money because we will be spending a lot of it on getting advanced machinery, technology development, manufacturing capability and creating the infrastructure.

The other alternative and advantage we could have is going with an all indigenous nuclear submarine fleet if it’s going to cost too much more.

 

[Anant]

We already have Germany's Foxtrot class, Russia's Kilo class, and the French Scorpene class. Why more hand-holding exercises are beyond anything rational, especially with OEMs unwilling to part with the technology they use, but only willing to give experimental designs, is a valid question.

The Russian Kilo-class and the German Type 209-1500 (not the Foxtrot, as that was an even older Soviet design) are both aging designs that have limited utility in a modern submarine design. Should we have learnt more from the Scorpenes? Yes, there can be no doubt in that. However, considering the position where we are with regards to building submarines, another project, no matter how distasteful, may well be required.

 

[Nivisri]

Can't agree with your statement that such phenomenal increase in the cost by about 70% is not unusual.
Most of the factors indicated by you as reasons for the higher price were nothing new and were supposed to have been considered even at the time of initial price estimation.

 

[Naveen Bijoy]

Is there any time schedule , when will first submarine will be delivered, and others to be delivered

 

[Naveen Bijoy]

Capex for Navy per se is not the issue but why is Scorpene technology not being used to develop a newer types of submarines with DRDO AIP system? Why do we need to start afresh? After all, India designs its own nuclear submarines!!

DRDO AIP system expected to join Navy by 2030-31.

 

[tlsmani]

Not gonna happen with MDL. Also, when you wait for nearly 10 years to complete the acquisition, what do you think will happen? Prices will increase. Our bureaucracy is extremely slow. And good subs aren't cheap. You can buy cheap Chinese subs or old Russian ones.

Indecision bureaucracy & procrastination on any defence procurement is the cause of delay & cost increase.