NEW DELHI: India on Thursday signed a deal to construct six French submarines in the country at a cost of over Rs. 15,000 crores.

The official go-ahead for this mega project had come through a joint statement made by Prime Minister Manmohan Singh and the French President Jacques Chirac in Paris on September 12.

The contract will just about fill the breach in submarine force levels that are poised to decline.

The deal has a 30 per cent offset clause, meaning that one-third of the cost of the deal would be met through import substitution. The first French Scorpene submarine will be ready for service within seven years of signing the contract. The others will follow at an interval of one year.

"The force levels will be down [by the time the first Scorpene is inducted] but we will improvise, if need be, by better deployments, upgrades or life extensions," said the Chief of Naval Staff Arun Prakash who along with a host of naval officers witnessed the signing of three contracts in the war room at South Block.

According to the agreement, India will build the submarines at Mazgaon Docks in Mumbai. Its submarine building facilities along with the workforce have been idle for 15 years since two German submarines were constructed. That contract was cancelled after bribery allegations surfaced against the company HDW.

The Delhi High Court later cleared HDW of bribery charges but the deal with the French company was too far advanced for it to make a comeback.

The Navy said the Scorpene is best suited to its requirements. Its advanced stealth characteristics make its detection difficult and superior detection capabilities lock on targets that can be destroyed with anti-ship missiles and wire-guided torpedoes. "The induction of Scorpene class submarines will provide the much desired impetus to Indian Navy's underwater might and will go a long way in securing India's maritime interests," said a statement by the Navy.

The first contract pertained to unhindered supply of equipment and services for the entire duration of the submarine building programme.

The second enjoins all parties to avoid all forms of corruption. The third contract is for transfer of technology and design of submarines and the supply of combat systems.

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