The group, one of the five shortlisted international players for the Rs 43,000-crore project, said it cannot meet conditions of the Request for Proposal (RFP) and will, therefore, not continue with its bid.

The project is the largest under the new strategic partnership model which will see an international Original Equipment Manufacturer (OEM) partner with an Indian company to manufacture submarines in India, and share the technology.

The P-75I is the second project to build submarines in India — the Naval Group just completed building six Kalvari class (Scorpene class) conventional submarines under the P-75 project in partnership with the Mazagon Dockyard Shipbuilding Limited (MDL) in India. The P-75 project was signed in 2005 (Naval Group was called DCNS then) and of the six, four submarines have already been commissioned into the Navy. The sixth in the class was launched last month and is expected to be commissioned late next year.

In a statement on April 30, Laurent Videau, Country and Managing Director, Naval Group India, said “the present RFP requires that the fuel cell AIP be sea proven, which is not the case for us yet since the French Navy does not use such a propulsion system.”

The AIP is Air-independent Propulsion technology for conventional submarines, and provides greater endurance, ability to remain submerged longer, and is less noisy than the diesel-electric propulsion system.

Videau said the Naval Group “has always been ready to offer the best in class and adapted solution for the Indian Navy’s P75(I) project, being fully in line with AatmaNirbhar Bharat principle”. He said the Group will “strengthen our existing commitments and look forward to closer association with India.”

“Our focus and efforts are towards continuation of our collaboration with Indian industry in realising the vision of Government of India by supporting Indian Navy for other future developments and projects (maintenance, high tech tools, indigenous AIP, incremental improvements in Scorpene designed submarine, HWT, larger ships etc.),” he said.

The announcement came days ahead of Prime Minister Modi’s scheduled visit to France on May 4 for a meeting with President Emmanuel Macron who was re-elected last month. In his departure statement, Modi said his meeting with Macron will “reaffirm the close friendship between the two countries” and “will also give us the opportunity to set the tone of the next phase of the India-France Strategic Partnership.”

The Naval Group’s withdrawal from the process has raised concerns about the P-75I project. While it has become the first of the five shortlisted OEMs to publicly pull out of the race, sources said that OEMs from Russia and Spain too are not participating effectively though they have not made any such announcement so far.

The government issued the RFP for the project in July last year — five shortlisted OEMs have to partner with one of the shortlisted Indian Strategic Partners (SP) to bid for the manufacture of the submarines.

The shortlisted SPs are Mazagon Dock Shipbuilders Limited (MDL) and Larsen & Toubro (L&T) who have to bid with any of the five foreign OEMs — Naval Group (France), ThyssenKrupp Marine Systems (Germany), JSC ROE (Russia), Daewoo Shipbuilding & Marine Engineering Co Ltd (South Korea) and Navantia (Spain).

Sources said the Naval Group cited the issue of demonstrating sea-proven AIP fuel cells for its inability to continue. But some of the OEMs, the sources said, are not comfortable about sharing their expertise and niche technology with Indian partners.

On the project, the government, at the time it issued the RFP, said it “envisages indigenous construction of six modern conventional submarines (including associated shore support, engineering support package, training and spares package) with contemporary equipment, weapons & sensors including fuel-cell based AIP (Air Independent Propulsion Plant), advanced torpedoes, modern missiles and state-of-the-art countermeasure systems. This would provide a major boost to the indigenous design and construction capability of submarines in India, in addition to bringing in the latest submarine design and technologies as part of the project.”