New Delhi — India’s $8 billion submarine project has hit a roadblock as contractor objections over sea trial procedures delay the Navy’s efforts to counter China’s growing influence in the Indian Ocean. The project to build six diesel-electric submarines under Prime Minister Narendra Modi’s defense policy is now postponed by at least a year, with further delays anticipated, according to sources familiar with the matter.
The stalled project not only hampers India’s military modernization but also tests the government’s defense acquisition strategy, which mandates foreign manufacturers to transfer technology and collaborate with local firms. German company ThyssenKrupp Marine Systems, partnered with Mazagon Dock Shipbuilders, and Larsen & Toubro’s collaboration with Spain’s Navantia SA, are competing for the deal.
Mazagon shares dropped over 4% following news of the delay, with other state-run shipbuilders like Garden Reach Shipbuilders & Engineers and Cochin Shipyard also facing market declines.
The delays arose after local contractors raised objections to procedural violations and ambiguities in sea trial guidelines during evaluations in June. These issues must be investigated before the project can move forward. The timing of the complaints has sparked speculation about potential attempts to stall the process by those fearing exclusion.
India’s Ministry of Defence has set up a committee to assess the competing proposals and advise on the final decision. A spokesperson for L&T declined to comment on the specifics, stating that the evaluation is still underway.
Prime Minister Modi’s broader defense goals aim to reduce reliance on imported weaponry—traditionally sourced from Russia—and transform India into an arms exporter. However, the delay threatens to undermine those ambitions as the nation grapples with domestic production challenges.