India has received a joint submarine design and construction proposal from Russia to build on the technology transfer acquired while building the nuclear fleet, and promises to drastically reduce the cost of Navy’s next-generation vessel plan.

The proposal, believed to have been discussed at the top level during the Sochi summit in May, offers an alternative to an upcoming $10 b P 75I tender for six new diesel electric submarines that the Navy requires. These are to be fitted with an Air Independent Propulsion (AIP) system that significantly increases their ability to stay underwater.

“The Russian side has offered a transfer of all intellectual property for the design and prototype construction. This will mean that there are also no limits to the number of submarines that can be built under the project…,” officials familiar with the details told ET.

While the current plan is to go in for a global competitive process that will involve companies from Russia, France, Germany and Sweden, the official proposal from Moscow is for a government-to-government deal for joint design with the Advanced Technology Vessel Project (ATVP). This is the project that gave India its first nuclear armed submarine, the INS Arihant, which was constructed in Vizag with considerable assistance from Russia.

A line of nuclear armed and nuclear powered submarines will be rolled out under the project which has completed the Indian nuclear triad — the ability to launch warheads from air, land and underwater.

Sources told ET that the proposal is for joint design and building of a prototype, following which the technical knowhow and papers would be transferred to the selected Indian shipyard for construction. The design consultancy for the project is pegged at under $200 million, something that could result in savings of immediate payments for the Navy for its next-generation submarines.

Under the competitive process, an initial payment of over $ 2 billion (20% of total cost) might be necessary, which given the Navy’s current budget projections, seems difficult. The proposal seeks to design the submarine to meet Indian requirements, including installation of the Brahmos missiles on board, as well as a jointly developed AIP system with the Defence Research and Development Organisation.

Sources involved in the Indian nuclear submarine project said that the proposal can build on the technology that has already been transferred to India but has to be scrutinized carefully to ensure that critical knowhow is not held back. Several parts required under the proposal are already being produced in India, including high strength steel for submarine hulls.