India refused to build submarines with Russia and preferred a contract with the Germans

India has abandoned another project with the Russians – the construction of submarines based on the Amur-1650 platform, an export version of the Lada 677 submarine project. Prior to that, India canceled contracts for Su-30MKI fighter jets and T-90 tanks, and then froze negotiations on the purchase of Ka-226T helicopters.

Source. Bloomberg

Although Rosoboronexport officials promised their Indian counterparts to localize production at Indian factories by 80% and appealed to the "strategic partnership" between the two countries, the military in New Delhi preferred to sign a contract with Germany to modernize its outdated fleet.

According to Bloomberg, India expects to purchase 6 submarines manufactured by the German concern Thyssenkrupp, which will create a joint venture with the Indian Mazagon Dock to implement the project.

The total value of the deal is estimated at $5.2 billion, and its preliminary approval is expected on Wednesday, June 7, when German Defense Minister Boris Pistorius arrives in New Delhi for a two-day visit.

"This will be a big and important contract not only for German industry, but also for India and for the India-Germany strategic partnership," Pistorius said, commenting on the upcoming trip. He added, however, that there are other competitors for the Indian contract, including France.

According to the Stockholm International Peace Research Institute (SIPRI), Russian arms sales to India have fallen by 37% over the past five years, a period during which Rosoboronexport has been under US sanctions.

The war in Ukraine and the new wave of sanctions, which have hit almost all major state-owned banks, have further complicated the situation. For a year now, India has been unable to find a way to transfer $2 billion in payments for weapons to Russia, and Russia, in turn, has suspended disbursements under a $10 billion credit line intended to purchase spare parts.

As a result, the contract for the sale of S-400 air defense missile systems to India signed in 2018 is being disrupted: India has received only two of the five systems.

Background. Meanwhile, it has become known that Russia is buying back its own weapons previously sold to Asian countries.