NEW DELHI — Private defense company Tata Power's Strategic Engineering Division (SED) has emerged as the lowest bidder to build 78 portable diver detection sonar (PDDS) systems.

Tata Power SED, whose parent company is Tata Group, quoted $20 million for the Buy and Make (India) category tender, against its rivals Elcome Integrated Systems at $26 million and Larsen & Toubro at $30 million.

This will be for the first time an Indian defense company will build PDDS systems for the Indian Navy. The service was previously sourcing the technology from Sonardyne in the United Kingdom.

A senior Indian Navy official confirmed that no domestic defense company has yet built PDDS systems, and that any domestic companies that do so will likely have to team up with foreign defense companies.

"A formal contact will be awarded to Tata Power SED within the next two months," he added.

In a 2014 tender for PDDS systems, Tata Power SED and Elcome Integrated Systems teamed up with DSIT of Israel, while Larsen & Toubro partnered with Atlas Elektronik of Germany. Indian state-owned Bharat Electronics Limited, which teamed with Thales of France, was technically disqualified.

"We want domestic companies to build more than 50 percent indigenous components in the PDDS program," said a senior Indian Ministry of Defence (MoD) official, who spoke on condition of anonymity.

The Indian Navy wants homemade PDDS systems that are capable of operating in shallow, or littoral, waters and can detect divers, underwater saboteurs and commando mini-submarines or midget subs. The PDDS systems would need to be capable of automatic detection and classification of detected, waterborne contacts in 36 degrees azimuth.

The PDDS systems will allow a diver to navigate underwater to map targets in real time. Additionally, the tech will gather data from targets and then provide information that will allow a diver to map topography.

However, the MoD is not very happy with the status of another Buy & Make (India) procurement of surface surveillance radar (SSR) systems, of which private defense company Nova Integrated Systems, a subsidiary of Tata Group, emerged as lowest bidder in February.

The senior MoD official said Nova Integrated Systems quoted a low price of $30 million to win the contract to build 31 SSR systems but is refusing to sign the contract on the grounds that the project is not economically viable for the company.