Seize the Moment

Cdr Shrikumar Sangiah (retd)

The announcement, earlier this year, of the imminent finalisation of the contract for building six of a new class of Air Independent Propulsion (AIP)-capable submarines in India sparked off breathless reportage in the media. The announcement also attracted considerable commentary from those who follow such news.

This new class of conventional submarines, the subject of the breathless reportage, is to be built under what has been christened -- the Project-75(India) or P-75(I). After the formal contract finalisation, construction of the six submarines will commence at Mazagon Docks Limited (MDL), Mumbai in collaboration with Thyssen Krupp Marine Systems (TKMS), Germany. The P-75(I) contract will progress under the Strategic Partnership (SP) model.

The SP model, the provisions of which were first promulgated in 2016 in the Defence Procurement Procedure-2016 (DPP-2016) will, initially, be effectuated for the indigenous manufacture of four select segments of weapon platforms—of which ‘submarines’ is but one segment; the other three being fighter aircraft, helicopters, and Armoured Fighting Vehicles (AFVs) and Main Battle Tanks (MBTs).

The avowed goal of the SP model is to spur indigenous production of defence equipment through greater private sector participation. Under the SP model, the Indian firm selected as the strategic partner, will tie up with one of the shortlisted foreign original equipment manufacturers (OEMs) for the manufacture of the targeted equipment/ platform.

The extensive reportage and commentary that followed the announcement of MDL’s selection as the SP for P-75(I) with TKMS as the foreign OEM, completely overlooked another equally significant announcement—TKMS’ CEO Oliver Burkhard in a statement to the Indian media announced that TKMS was willing to partner MDL to establish a warship building hub in India.

Burkhard added that in TKMS’ assessment, India held immense potential to emerge as a global hub for submarine and warship construction. Further, he believes that such an initiative could profitably capitalise on the growing global demand for naval assets triggered by recent geopolitical developments.

“We want to foster the partnership over this project, (which) will be the entry, from a strategic perspective, to the (larger) attainable market. It can double and even treble within 10 years”, Burkhard is reported to have told the assembled media persons.

According to Burkhard, naval vessels could be built in India at 50 per cent of the cost of building them in western shipyards—making such a venture an attractive option for fulfilling domestic and export orders.

Although not highlighted by TKMS, any such venture could, besides shipbuilding, more broadly also pursue the construction of other classes of vessels—for merchant shipping, for specialised applications such as the installation of offshore wind farms, for the fishing industry, and vessels and platforms for the oil and gas industry. Additionally, the venture could also provide ship repair and engineering support services, etc.

Balancing Competing Opportunities

In February 2004, Mark Zuckerberg and his team launched Facebook from a Harvard dorm room. By the end of 2004, Facebook had one million users and was firmly on its way to becoming a tech giant. Its rapid growth attracted global attention, with media celebrating it as a revolutionary means to connect people.

At the same time, a quieter but equally groundbreaking scientific achievement was unfolding—the discovery of graphene. In 2004, two Russian-British physicists Andre Geim and Konstantin Novoselov, at the University of Manchester, isolated graphene—a single layer of carbon atoms with extraordinary properties—stronger than steel, highly conductive, and incredibly thin. Their work, published in Science in October 2004, promised revolutionary applications in electronics, energy storage, medical devices, etc.

Graphene’s potential to transform several industries was immense. But, in 2004 it attracted scant public or commercial attention—overshadowed by the buzz around Facebook and other consumer tech trends.

While Facebook’s growth attracted a flurry of investments and triggered long-term cultural shifts, graphene research, in its early years, struggled for exposure and funding. This delayed the development of graphene-based technologies, such as advanced batteries or medical sensors, which began gaining traction nearly a decade later—in 2010—when Geim and Novoselov won the Nobel Prize for Physics.

Had graphene received comparable attention in 2004, accelerated research and commercialisation could potentially have helped the world address challenges in renewable energy and healthcare sooner.

The excessive focus on Facebook led to the neglect of work on graphene applications—imposing long-term opportunity costs via the delayed follow-on technological progress. The accessible allure of Facebook overshadowed graphene’s difficult-to-reach promise.

In a parallel that is hard to miss, the current flutter surrounding the P-75(I) contract has everyone in its thrall and TKMS’ offer to collaborate with Indian shipyards to establish India as a shipbuilding hub is largely being ignored.

The singular focus on the P-75(I) contract at the cost of the other offer on the table for the establishment of a shipbuilding and engineering services hub is undesirable. The twin TKMS offers present India with unique opportunities that, if harnessed together, could provide enormous long-term gains.

These offers are intertwined and neglecting one ignores obvious synergies, risks the other opportunity losing momentum, stunts the growth of the other, and shrinks their collective benefit. Acting on both now, through balanced attention and support, will create a multiplier effect that will drive the growth of both the opportunities.

The Chinese Example

Over the past few decades, the Chinese shipbuilding industry has undergone a remarkable transformation to emerge as the global leader in ship building. Starting in the late Eighties, China’s shipbuilding industry began leveraging strategic government policies, technological advancements, and economic reforms to gain dominance in the global shipbuilding market.

In the early Eighties, China’s shipbuilding sector was modest, primarily focused on domestic needs and basic vessels. The industry was state-controlled, with limited technological capabilities and low output. However, economic reforms under Deng Xiaoping opened the door to modernisation. The government identified shipbuilding as a strategic industry, offering subsidies, tax incentives, and access to foreign technology through joint ventures. This catalysed the expansion of shipyards, state-owned and private, particularly in the coastal regions of Shanghai, Dalian, and Guangzhou. By the Nineties, China began building specialised vessels, including bulk carriers and oil tankers, for both domestic and international markets.

The early 2000s marked a turning point. China’s entry into the World Trade Organisation (WTO) in 2001 boosted its integration into global trade and spurred an ever-increasing demand for commercial ships. This further swelled the number of state-owned and private shipyards that sprung up in response to the