India Seeks to Buy $2.2 Billion Warships to Meet China Challenge

(Bloomberg) -- India sought bids for purchase of warships and support vessels for its navy and coast guard as it ramps up security of its maritime border in the Indian Ocean region.

The Narendra Modi government on Monday asked seven shipyards to submit proposals for the construction of six missile warships and other smaller vessels worth 150 billion rupees ($2.2 billion), the Ministry of Defence said in a statement. The tender includes eight fast patrol vessels, 12 hovercrafts and eight missile-cum-ammunition barges.

The shipbuilders invited include private shipyards Larsen & Toubro Ltd. and Reliance Naval & Engineering Ltd., apart from the state-run Mazagon Dock Shipbuilders Ltd., Garden Reach Shipbuilders and Engineers Ltd., Goa Shipyard Ltd., Hindustan Shipyard Ltd. and Cochin Shipyard Ltd., people with knowledge of the matter said. They asked not to be identified citing rules.

The tenders are part of Modi's $250-billion military modernization plan to arm the South Asian nation at a time when it faces threats in its maritime waters from its neighbor China. Beijing has in the past sent its warships to the Indian Ocean region, ostensibly for providing security to its oil tankers.

Shipyards were finalized after consultations with the Navy and the Coast Guard based on their ability to build missile warships, the ministry said in the statement. Financial criteria has also been rationalized to add a larger pool of players, it added.

“In addition to the above, a few more request for proposals for more shipbuilding projects are likely to be issued in the next few months,” the statement said.

On June 20, the defense ministry had issued its first military tender under the second Modi government for building six submarines for the Indian Navy for a cost of 450 billion rupees.

Indian Navy targets a fleet of 200 warships by 2027 but is woefully short with a current strength of 140 warships. The Indian Coast Guard too plans to have 200 vessels by 2022, but is short by 35 ships.

To contact the reporter on this story: N. C. Bipindra in New Delhi at nbipindra@bloomberg.net

To contact the editors responsible for this story: Unni Krishnan at ukrishnan2@bloomberg.net, Abhay Singh

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