India’s ambitious USD 6 billion plan to build submarines for the Indian Navy has hit a major roadblock due to complaints from contractors about the sea trials. The project, designed to modernize the Navy amid China's growing presence in the Indian Ocean, now faces a year-long delay, with further setbacks expected. This delay is a significant challenge for Prime Minister Narendra Modi’s defense policy, which focuses on boosting local manufacturing through partnerships with foreign companies.

The project, which aims to build six conventional diesel-electric submarines, was expected to strengthen India’s naval capabilities. However, contractor objections related to procedural issues during the sea tests have delayed the process. According to two senior officials, who wished to remain anonymous, the selection process for contractors has been stalled, with investigations required for several complaints.

The project is being led by German defense manufacturer ThyssenKrupp Marine Systems, partnering with Mazagon Dock Shipbuilders Ltd., a state-owned shipyard in India, and Spain’s Navantia SA working with India’s private shipbuilder Larsen & Toubro Ltd. These companies are competing to secure the contract. Some contractors have suggested that these objections might be an attempt to stall the project to prevent losing the contract.

The Ministry of Defense in India has formed a committee to assess the objections and advise the government on the next steps. This submarine program is an important test of Modi’s new defense acquisition policy, which aims to reduce India’s reliance on imported military hardware by encouraging foreign manufacturers to transfer technology to local firms. India is the world’s largest importer of weapons, and this policy aims to help build a robust domestic defense industry.

India’s existing fleet of submarines, including about 16 Russian and German-made vessels, is aging, with many submarines having undergone numerous upgrades over the past few decades. The new submarines were expected to begin joining the fleet by the early 2030s, coinciding with the decommissioning of older vessels. In addition to conventional submarines, India also plans to build two nuclear-powered submarines with conventional weapons.

A successful submarine project would not only bolster India’s military strength but could also establish the country as a key low-cost manufacturing hub for military equipment, especially as the demand for weapons rises globally, particularly in Europe due to the ongoing Russia-Ukraine war.

India’s strengthening relationships with Western allies, including the United States, Japan, and Australia through the Quad bloc, further underscore the strategic importance of this defense project. High-level meetings, including visits by German Chancellor Olaf Scholz and Spanish Prime Minister Pedro Sanchez, have highlighted defense cooperation as a key area of focus, with both countries supporting India’s efforts to build domestic defense capabilities.