India to go ahead with $2.3 billion Turkish shipyard deal

India is going ahead with a $2.3 billion (about Rs 15,000 crore) deal to manufacture fleet support vessels (FSVs) in collaboration with a Turkish shipyard following a review after questions were raised on Turkey’s links with Pakistan and the recent diplomatic tiff with the Recep Tayyip Erdogan government.

The formal contract was signed days after India issued a strong statement rejecting all references made to Jammu and Kashmir in a joint declaration by Turkey and Pakistan during President Erdogan’s visit to Islamabad last month.

Turkey’s TAIS had emerged as the lowest bidder for a contract to manufacture five of the 45,000-tonne FSVs at the Vizag-based Hindustan Shipyard Limited (HSL) last year, but the contract signing was put on hold in October following the repeated raising of Kashmir issue by Erdogan at international forums.

The contract was signed by HSL last month after clearances were given by the Ministry of Defence (MoD), said people aware of the matter. They said the Ministry of External Affairs was also consulted before the decision was taken.

🇹🇷🇮🇳 @TaisShipyards Gen Md Doğan Beşcan:

Aldığımız Hindistan Filo Destek Gemisi işi TR’nin en büyük savunma ihracatı (İş toplam bedeli $2,3 milyar).

Dünyanın en büyük 8 firmasını eledik.

5 ad 45 bin ton gemi inşa edilecek.

İş orada yapılacak. 60 personelimiz 9 yıl çalışacak. pic.twitter.com/sCPGiiZqey

— Turan Oguz (@TyrannosurusRex) April 8, 2021

HSL had been keen to resolve the matter at the earliest and had written several letters to the defence ministry over the past few months. “MoD has directed HSL to put the project on temporary hold in view of recent diplomatic developments with Turkey. HSL inputs regarding the legal and financial implications of cancelling the bid of M/s Anadolu shipyard have been submitted to the MoD,” the ministry told the parliamentary standing committee on defence.

The defence ministry’s vigilance department was asked to review the order and gave a go-ahead, said one of the persons, who did not wish to be identified. Similarly, inputs were received from MEA on diplomatic implications, after which it was decided to proceed with the Turkish collaborator. The contract was signed last month after the defence ministry removed its temporary hold order.