India and Germany are close to finalising a $8-billion Project-75(I) submarine manufacturing agreement, which is poised to become India’s largest-ever defence deal.
As negotiations reach an advanced stage, the agreement, expected to be signed by March-end will mark a historic milestone in Indo-German defence cooperation, said reports.
The long-pending Project-75 India (P-75I) aims to address the Indian Navy’s ageing conventional submarine fleet, significantly enhance underwater combat capabilities, and strengthen maritime deterrence in the Indo-Pacific region, at a time when both China and Pakistan are expanding their presence in the Indian Ocean Region.
The P-75I programme is estimated to cost between Rs 70,000 crore and Rs 72,000 crore ($8 billion), making it larger than the Rs 58,000-crore deal for 36 Rafale fighter jets signed with France in September 2016.
The project involves the construction of six advanced conventional diesel-electric attack submarines.
The selected Type-214 next-generation submarines have been chosen for their proven fuel-cell-based air-independent propulsion (AIP) technology, which allows them to remain submerged for weeks instead of a few days, significantly reducing the risk of detection.
Under a strategic partnership model, Mazagon Dock Shipbuilders Ltd (MDL) will build the submarines in India in collaboration with Germany’s ThyssenKrupp Marine Systems (TKMS), with a target of 45–60% indigenisation to support the Make-in-India initiative.
The proposed agreement, which reportedly received fresh momentum during German Chancellor Friedrich Merz’s visit to India on January 12 and 13, may also include technology transfer for submarine production.
The Indian Navy currently operates around a dozen Russian-origin submarines along with six newer French-made submarines.
The procurement of six submarines under Project-75(I) was approved by the Defence Acquisition Council in October 2014, following which the Defence Ministry issued the Request for Proposal (RFP) for six AIP-equipped conventional submarines on July 20, 2021.
Beyond strengthening naval combat capability, the submarine project is expected to provide a major boost to India’s shipbuilding and manufacturing ecosystem, particularly micro, small and medium enterprises (MSMEs), through the development of an industrial base for submarine-related spares, systems and equipment.
In recent years, the government has intensified efforts to implement the Indian Naval Indigenisation Plan 2015–2030. Under this plan, 51 large naval vessels, valued at approximately Rs 90,000 crore, are currently under construction in Indian shipyards.
Since 2014, Indian shipyards have delivered over 40 indigenous warships and submarines to the Navy, with a new vessel being inducted on average every 40 days over the past year.