India invites Japan to be part of Rs 50,000 cr defence project

Sai Nikesh | The Dollar Business

From the recent 10-year-long Defence Framework Agreement with the United States, discussion over the implementation of the joint project of  Fifth Generation Fighter Jet with Russian Defence Minister, to the very latest proposal made to  Japan over the making of Rs 50,000 crore-worth submarine project, India is riding high on defence deals. According to a latest report, the Government of India has put before the Government of Japan, a proposal to consider the possibility of making its latest diesel-electric Soryu-class submarines in India. It is noteworthy to mention that Australia is also considering the Soryu submarines to replace its ageing Collins-class vessels.  According to the Defence news reports, the Modi government has asked the Shinzo Abe administration if it could build six stealth submarines in India, the total project costing of which amounts to Rs 50,000 crore.  While the possible sale of Japanese US-2i ShinMayva amphibious aircraft to the Indian Navy is already on cards, the Indian government making a new proposal to Japan gains strategic importance. This also comes in the light of recently ended Japan’s self-imposed export ban. India’s move would probably alert France, Russia, Germany and Spain, which are the usual contenders to the supply of submarines to India.  The six new submarines, with both land-attack missile capabilities and air-independent propulsion for greater underwater endurance, are to be built at an Indian shipyard with foreign collaboration. "If Japan is really interested, it will have to form a joint venture with an Indian public/private shipyard," say the sources.  If Japan agrees to this proposal, it would also become one of the prime contenders for India’s Project-75-I programme, which was estimated at more than $10 billion according to the global security report. Under Project-75-I project, India is intended to buy six next generation diesel submarines with Air Independent Propulsion System technology for the Indian Navy by 2022.  According to the earlier reports, the Indian Navy thought of preparing the submarines indigenously, due to a long delay of more than seven years since the deal has been signed. To this effect, a high-level committee, led by Vice Admiral AV Subhedar, is slated to submit a report to the defence ministry next month on the domestic shipyards which are capable of submarine-manufacturing. According to the Institute of Defence Studies and Analysis, India-Japan bilateral trade declined to $16.31 billion in 2013, which is 11.89% lower compared to the $18.43 billion in 2012. India-Japan total trade during 2013-14 was $16,294.82 million, which was lesser than that of $18,512.35million in 2012-13. While the India-Japan bilateral trade represents approximately one per cent of Japan’s overall foreign trade, it amounts to 2.2-2.5 per cent of India’s total trade.   

This article was published on January 29, 2015.