India’s Defence Ministry has decided to award a US $1.2 billion contract to Kangnam Corp. for eight mine-countermeasure vessels in India’s first big-ticket defense program with South Korea.
The deal has been cleared ahead of Indian Defence Minister A.K. Antony’s planned visit to Seoul later this year, and will help boost defense ties with South Korea, an Indian MoD official said.
The finalization of the contract was delayed after Italy’s Intermarine, which was competing for the contract, approached India’s anti-fraud agency, the Central Vigilance Commission (CVC), with issues related to the transparency of the procurement. The CVC cleared the purchase last year, but the MoD has since dragged its feet in deciding to award the contract, the source said.
India is reaching out to friendly nations in the region, including Japan and South Korea, as part of its Look East policy in a bid to contain the rising influence of China, said defense analyst Mahindra Singh.
The Indian Navy is likely to give additional orders to the South Korean company for the countermine ships, since the service has a requirement for more than 24 minesweepers, an MoD source said. The Indian Navy operates 12 aging Pondicherry and Karwar-class minesweepers.
The purchase of the new countermine ships is part of a long-term plan to acquire vessels for littoral warfare, including large landing platform decks, fast attack craft and advanced offshore patrol vessels.
In 2008, India sent bids for the countermine ships to Kangnam, Intermarine, Northrop Grumman, Izhar of Spain and DCN International of France.
The Navy has wanted new minesweepers for more than 13 years, but delays in procurement due to bureaucratic red tape have been holding back the order.
According to the deal, the first two minesweepers will be constructed at Pusan, South Korea, and the remaining six will be built at the Goa Shipyard through technology transfers.
South Korea has become a big-ticket supplier of weapons to India — along with Russia, Israel, the United States and France — and is aggressively tapping India’s $100 billion weapons market.
Samsung has jointly developed a howitzer gun with Indian private-sector company Larsen & Toubro, and it is likely to put up a tough fight against Russia’s Rosoboronoexport in the quest to supply 155mm/52-caliber tracked guns.
The Larsen & Toubro-Samsung team is competing with Rosoboronexport, and with state-owned Bharat Earth Movers Ltd. (BEML), which has partnered with Slovakian company Konstrukha.
The Indian Army wants to buy 100 tracked guns valued at more than $750 million. The tender, issued in 2011, was a rebid of a 2007 tender, which went to India’s Tata Power SED, Larsen & Toubro, BEML and Rosoboronexport.
South Korean firm Doosan has also been given a tender this year for the purchase of 104 self-propelled gun missile systems to replace aging Russian Kvadrat systems.
Indo-South Korean defense ties began in 2005, when the two countries signed a memorandum of understanding on defense logistics and supplies.
In 2007, the defense ministers of the two countries met to hash out a defense cooperation plan, which was followed in 2010 by the signing of a declaration of strategic partnership.
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