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India needs more than "Short List" of 1 for Submarine Project-75I

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A further comment following Russia to benefit from India's Project-75I AIP Transfer Exercise of August 21, 2021.

India, has effectively eliminated 3 contestants (Russia, France and Spain) from its long running Project-75I. Germany's TKMS also flagged it may drop out. This would only leave South Korea's (SK's) DSME. If India wants to avoid an uncontested "short list" of one India will need to significantly alter the transfer (and re-use) of AIP and other technology terms. Or perhaps India could pay a much higher price.

An uncontested result would give DSME superior bargaining power over India, in technology transfer and local content levels. Just as important DSME could sharply increase prices (eg. development, build per unit, training, spares, etc) upfront and then later, via onerous contract milestones. 

It is also unclear what submarine type DSME is offering. I'm assuming India would want the, less than 2,000 tonne, medium sized, cheaper, Type 214, variant with AIP. DSME has built it as the KSS-2 for SK's navy. However NavalNews, June 16, 2021, reported DSME might also be offering India its 3,000+ tonne KSS-3 (with AIP and maybe for Lithium-ion Batteries (LIBs)). 

DSME selling a KSS-3 to India would be a much more expensive proposition for India than a KSS-2. If India (via export customer sale dynamics) could cross-subsidize the very high development costs of the, so far, SK Navy only KSS-3 then DSME and the SK Navy would be very happy. Sale of the much larger, more expensive, KSS-3 would also attract a higher profit margin for DSME.

So India is likely to want to keep Germany's TKMS, with the Type 212, in the Project-75I shortlist along with DSME. Though even with TKMS there may be uncertainty for India. Indian selectors now have a choice of 2 AIP Type 212s from TKMS. TKMS may prefer to sell India 6 of the new, much larger, more expensive 2,500+ tonne Type 212CDs rather than 6 of the smaller, cheaper, established 212As (weighing in at less than 2,000 tonnes).

The longer India haggles and procrastinates over Project-75I the steeper the price increases offered by the declining short list of sellers.


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