Korea to Export Military Vessels to India, Indonesia

Korea is expected to sell minesweepers worth US$500 million to India and submarines worth $1-1.2 billion to Indonesia, a government official said on Thursday. They are the country's biggest arms exports so far, exceeding even the $400 million sale of T-50 supersonic trainer jets to Indonesia.

"Outbidding an Italian rival early this year, a Korean firm has been chosen as the priority negotiating partner for India's minesweeper project," a government source said. "The negotiations are in their final stage and the contract will likely be signed as early as August."

India is expected to buy eight minesweepers worth $500 million.

Daewoo Shipbuilding and Marine Engineering has recently been picked as the preferred bidder alongside a French firm for Indonesia's submarine project. Korea competed with Germany, France, and Russia in the bid.

Of its current fleet of 209-class, 1,200 ton submarines, Korea bought one from Germany in the early 1990s and built eight others with imported technology, but now it has outperformed Germany in the bid.

The Indonesian Defense Ministry will likely select the priority negotiating partner in July or August. If it wins the contract, DSME will build three 209-class subs in Korea and Indonesia.

India is a huge defense industry market, and the minesweeper deal could open the way for Korea to take part in other large projects there as Delhi is accelerating its maritime buildup, including building aircraft carriers and destroyers.

The export of subs to Indonesia could give Korea a strategic foothold in the Southeast Asian submarine market at a time when Indonesia, Malaysia, Thailand, and Singapore are competing in a submarine race.

Last year, Korea exported a total of $1.19 billion worth of arms. This year's export goal is $1.6 billion, which the two deals alone would comfortably exceed.