India shelves plan to expand French submarine order after data breach

September 3, 2016 6:20 AM EDT

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By Sanjeev Miglani

NEW DELHI (Reuters) - India is unlikely to give French naval contractor DCNS a proposed order for three new submarines, in addition to the six it is already building in the country, following the leak of secret data about its capabilities, Indian defense officials said.

Details of the Scorpene submarine were published in the Australian newspaper last month, triggering concerns that it had become vulnerable even before it was ready to enter service.

DCNS had offered to build three more submarines to help India replace its aging Soviet-era fleet, and had held talks over the past year, two Indian sources said.

That offer will not now be taken up, according to the officials.

"We had an agreement for six, and six it will remain," a defense ministry official briefed on the navy's plans told Reuters, speaking on condition of anonymity.

A spokesman of the Indian Navy confirmed that the orders would not be placed for three more submarines.

"Indian has ordered only six Scorpene submarines and orders have not been placed for three more as reported by some media. Therefore question of cancellation does not arise," the spokesman said

A navy officer said there had been a serious breach of data and the navy's efforts were focused on determining the damage done to the existing submarines.

"No order will be signed, nothing is going to happen now," the officer, who is also been briefed on the submarine data leak, said when asked if the government planned to enlarge the order.

India's defense ministry has written to DCNS asking for details about the extent of the leak and how data relating to the Scorpene's intelligence gathering frequencies, diving depth, endurance and weapons specifications had ended up in the public domain, both officials said.

A naval group headed by a three-star admiral is looking at altering some features of the submarine, the first of which began sea trials in May for induction later this year, to minimize any damage.

The remaining five are in various stages of production at state-run Mazgaon Docks shipyard in Mumbai and they were all due to enter service by 2020.


An official at Mazgaon Docks said the firm was focused on completing the original order of six Scorpenes and that he was not aware of any plan to build more.

A DCNS spokesman said the firm was in close touch with "our key customers like India to keep them informed of the development of our investigation, respond to their questions and mitigate their legitimate worries".

"The investigation is still ongoing and one of its objectives is to determine the potential prejudice and minimize its potential consequences," the spokesman said.

DCNS is preparing to build a new fleet of submarines in Australia for A$50 billion ($38.13 billion). Australian defense officials have warned the firm to beef up security in the wake of the leak.

DCNS has said that the leak, which covered details of the Scorpene-class model and not the vessel currently being designed for the Australian fleet, bore the hallmarks of "economic warfare" carried out by frustrated competitors.

Indian officials have pointed to a "non-disclosure of information" clause that was written into the 2005 contract at French insistence, the first defense ministry official briefed on the communication with the DCNS, said.

But the official said the government could only invoke that clause if it was established that the data was leaked and not stolen.

A French government source has said the firm had apparently been robbed, and it was not a leak, adding it was unlikely classified data was stolen.


Indian submarine experts say that, while the breach in information security was serious, it does not make the Scorpenes immediately vulnerable to detection.

The most vital data about a submarine is its unique "signature" of noise, heat and electro-magnetic emissions, and it is the combination of such signatures that determines the ability to detect them.

"If that is gone, then you might as well say goodbye to the submarine. You are exposed," said former vice admiral and submariner A.K.Singh.

Such signatures are assembled in the course of the sea trials of a submarine, and in the case of the Scorpenes that has yet to happen, he said.

India's submarine arm is down to 13 vessels, only half of which are operational at any time, and is falling rapidly behind China, which is expanding its maritime presence in the Indian Ocean.

Even Pakistan, which operates Agosta submarines also built by DCNS and is in talks with China for a new set of submarines, is drawing close to the operational strength of the Indian navy.

The Indian government has approved the acquisition of the next generation of submarines beyond the Scorpene, in an project estimated at $8 billion.

DCNS has expressed an interest in that project, as has Russia and Germany's ThyssenKrupp Marine Systems.

The first defense official said he did not expect any movement on that project until the investigation into the Scorpene leak was completed and new security measures put in place.

(Additional reporting by Tim Hepher in PARIS; Editing by Alex Richardson)

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