Damage caused by French submarine, India investigates

India is investigating the extent to which secrets about French Scorpene submarines being built in the country have been compromised, its defence ministry said on Wednesday, after a leak of documents relating to its combat capabilities.

The leak, which was first reported in The Australian newspaper, contains more than 22,000 pages outlining the secret capabilities of six submarines that French builder DCNS has designed for the Indian Navy.

"I understand there has been a case of hacking," Indian Defence Minister Manohar Parrikar told reporters. "We will find out what has happened."

The submarines are being built at a state-run shipyard in Mumbai and the first one was expected to go into service by the end of the year, the first step in the Indian navy's effort to rebuild its dwindling fleet.

The massive leak has also raised doubts about the security of DCNS's submarine project in Australia where it won a A$50 billion ($38.06 billion) contract to build the next generation of the submarines.

DCNS beat out Germany's ThyssenKrupp AG (TKAG.DE) and a Japanese-government backed bid by Mitsubishi Heavy Industries (7011.T) and Kawasaki Heavy Industries (7012.T), in a blow to Japanese Prime Minister Shinzo Abe's push to develop defence export capabilities as part of a more muscular security agenda.

The leaked documents cover the Scorpene-class model and do not contain any details of the vessel currently being designed for the Australian fleet.

DCNS said it could not immediately authenticate the documents, but would not rule out that the leak was part of an "economic war" waged by the competitors it beat in the contest for the Australian contract.

"For now we don't know if the information is correct," a DCNS spokeswoman said. "The competition is more and more hard and all means can be used in this context.

"There is India, Australia and other prospects, and other countries could raise legitimate questions over DCNS. It's part of the tools in economic war," she said.

Thales (TCFP.PA), which owns 35 percent of the shipbuilder, could not immediately be reached for comment outside normal European business hours. The French defence ministry declined to make an immediate comment.

Thales was down more than 2 percent in early trading, while the wider French blue-chip index .FCHI was down 0.75 percent.

MAJOR STRATEGIC PROBLEM

The breadth of detail in the documents creates a major strategic problem for India, Malaysia and Chile, all of which operate the same submarine, an Australian political source with decades of experience in the global arms industry told Reuters.

Excerpts published in redacted form on the newspaper's website contained highly sensitive details of the submarine including technical manuals and models of the boat's antennae.

"If it's 22,400 pages, it's a major stuff-up," the source said. "It's a huge deal.

"It allows them to understand everything about the submarines. What speeds it can do; how noisy it is; what speeds the mast can be raised at ... all of that is just devastating."

The Indian Defence Ministry said it was investigating the impact of the leak on the submarine programme which it said had occurred from abroad. It gave no details.

"The available information is being examined at Integrated Headquarters, Ministry of Defence (Navy) and an analysis is being carried out by the concerned specialists," it said in a statement.

"It appears that the source of leak is from overseas and not in India."

Uday Bhaskar, a former naval officer, said that if the leak was established, it would amount to a significant compromise of the credibility of the submarines.

India has a fleet of 13 ageing submarines, only half of which are operational at any time, opening up a major gap with China which is expanding its maritime presence in the Indian Ocean.

Australian Prime Minister Malcolm Turnbull sought to deflect concern about the leak, touting the high security standards in Australia, where the submarine will be built. The Australian reported that the leak occurred in France in 2011.

"But clearly, it is a reminder that, particularly in this digital world, cyber security is of critical importance," he told the Seven TV network.