Navy agrees to buy four Russian frigates for $3 billion

This will be the first capital warship contract since Project 17A was signed in early 2015 (above: INS Teg)

By Ajai Shukla

Business Standard, 26th Feb 18

New Delhi and Moscow have finalised contractual terms for four new stealth frigates that Russia will supply the Indian Navy for slightly over Rs 20,000 crore ($3 billion), or about Rs 5,000 crore ($775 million) per vessel.

Designated the “Upgraded Krivak III-class”, the first two frigates will be built in Yantar Shipyard, in Kaliningrad, Russia. The following two will be built in Goa Shipyard Ltd (GSL) with technology and designs transferred by Yantar. Delivery will begin within four years of signing the contract.

With a defence ministry “cost negotiation committee” having hammered out terms, it remains for the finance ministry and the cabinet to clear what will be the first capital warship contract signed since Project 17A was contracted in early-2015.

The navy already operates six Krivak III frigates. The first three joined the fleet between June 2003 and April 2004, followed by another three between April 2012 and June 2013. With the current contract, the navy will operate ten Krivak III frigates – the fleet’s largest single type.

The Krivak III costs marginally less than the Rs 5,750 crore ($888 million) that the navy will pay for each of seven indigenous frigates that Mazagon Dock Ltd, Mumbai (MDL) and Garden Reach Shipbuilders and Engineers, Kolkata (GRSE) have been contracted to build under Project 17A.

However, tonne-for-tonne, the indigenous frigates are cheaper. Each displaces about 5,600 tonnes fully loaded, significantly more muscular than the 4,000-tonne Krivak III. Further, each Project 17A frigate has space for two multi-role helicopters, while the smaller Krivak III embarks just a single Kamov-31 chopper. An extra helicopter provides major advantages in anti-submarine operations and airborne early warning.

Even so, with MDL, GRSE and GSL already stretched to capacity, navy planners are satisfied that Yantar is meeting India’s urgent need for more capital warships. The navy is also pleased with how the Krivak III fleet has performed over time.

New Delhi wanted to build all four Krivak III frigates in GSL under “Make in India”. However, Yantar had already part-built two frigates for the Russian Navy, which then backed away for lack of funds. New Delhi has obliged Moscow by buying them.

The part-built frigates at Yantar are also stalled by a defence embargo that Ukraine imposed on Russia after the latter annexed the Crimea. New Delhi, which has close defence relations with Ukraine, has undertaken to procure and provide Yantar the Zorya turbines that will power them.

The agreed terms stipulate a certain level of Indian-isation for the first two vessels that Yantar will deliver, and a significantly higher level for the next two vessels that are to be built in Goa.

For GSL, building a vessel as complex as a frigate will require upgrading its facilities and skills. However, naval planners say GSL should not take long to learn, having recently undergone the experience of building missile corvettes that are similarly dense in weapons and sensors.

These new Krivak III frigates will have the same engines and armament configuration as Yantar’s last three frigates – INS Teg, Tarkash and Trikand. These include the vaunted BrahMos anti-ship and land attack missile.

Senior naval planners underline the advantages of negotiating a “follow-on” contract, i.e. for vessels similar to those procured earlier. While it took six months to negotiate the contract for the Teg, Tarkash and Trikand, negotiations for the current contract took just 45 days to negotiate and finalise.

The navy’s medium term plans envisage increasing warship strength from the current 140-odd, to 198 warships by 2027. This will require adding 5-6 warships annually.

While some 75 vessels of various types are in the navy’s procurement pipeline, there remains a worrying shortfall of frigates, which are the navy’s workhorses. “We need to have at least 24 frigates. Currently we are ten short”, says a senior admiral.