Context:

The Ministry of Defence (MoD) has signed two significant contracts worth approximately Rs 2,867 crore to enhance the capabilities of the Indian Navy’s submarines. 

Key Highlights of Agreements

• Both agreements are under the 'Make in India' initiative, which means the propulsion system as well as the torpedoes will be manufactured in India.
• The agreements focus on integrating advanced Air Independent Propulsion (AIP) systems and Electronic Heavy Weight Torpedoes (EHWT) on Indian submarines.

1. Air Independent Propulsion Plug (AIP) Development: It is the first contract valued at Rs 1,990 crore. 

• It has been signed with Mazagon Dock Shipbuilders Limited (MDL), Mumbai, for the construction of an AIP Plug and its integration into submarines. 
• The AIP system is being indigenously developed by the Defence Research and Development Organisation (DRDO), extending the stealth and endurance of conventional submarines by enabling them to remain submerged for longer durations. 

2. Electronic Heavy-Weight Torpedo Integration: It is the second contract worth Rs 877 crore. 

• The integration of EHWT will be a collaborative effort by the Indian Navy, DRDO and Naval Group, France. 
• It would greatly augment the firepower capabilities of Kalvari Class (Made under Project 75, Diesel-electric) submarines of the Indian Navy. 

Strategic Importance

• These advancements mark a major milestone in India’s efforts to modernize its naval fleet and develop Indigenous defence capabilities. 
• This move is strategically important in an era where global supply chains for defence technology are increasingly volatile, and self-sufficiency in defence technology strengthens India's position as a regional power.
• By boosting its submarine capabilities, India can ensure the security of these vital maritime routes, deter any adversarial naval activity, and maintain a balance of power in the region.