By N. C. Bipindra

New Delhi: India and Germany are close to finalising a historic USD 8 billion submarine manufacturing agreement, a deal that could become the largest defence contract ever signed by New Delhi and mark a decisive shift in India’s long-term naval strategy.

Negotiated ahead of German Chancellor Friedrich Merz’s first official visit to India next week, the proposed agreement is significant not just for its scale, but for its promise of full technology transfer, a rarity in submarine programmes globally.

According to officials familiar with the discussions, the deal would see Germany’s Thyssenkrupp Marine Systems (TKMS) partner with Mazagon Dock Shipbuilders Limited (MDL) to manufacture advanced conventional submarines in India.

Crucially, this would be the first time India gains access to core submarine production technologies from a foreign partner, reinforcing New Delhi’s push to build complex military platforms domestically rather than rely on imports.

If the agreement goes through, India is expected to take up plans to acquire three additional French-made Scorpene submarines, a follow-on for the already executed six submarines under Project 75, in the next financial year starting April 2026, signalling a strategic recalibration in its defence procurement priorities.

Indian Navy has already signalled that it targets signing of the contract with TKMS for six advanced submarines within the current fiscal ending March 2026, under what is popularly called in the defence circles as Project 75(I).

The Indian Navy currently operates around a dozen ageing Russian-origin submarines, along with six newer French-built boats, highlighting the urgent need for fleet renewal as regional maritime competition intensifies.

The submarines under discussion will be equipped with air-independent propulsion (AIP) systems, which allow vessels to remain submerged far longer than traditional diesel-electric submarines.

This capability dramatically enhances stealth and endurance, making the platforms better suited for sustained surveillance and deterrence missions.

For India, this is particularly relevant as it seeks to police the vast Indian Ocean Region, where China has steadily increased its naval presence through deployments, port access, and undersea activity.

The timing of the negotiations underlines the broader strategic intent behind the deal. Chancellor Merz’s visit will include talks with Prime Minister Narendra Modi in Gujarat, followed by engagements with German companies in Bengaluru, India’s technology hub.

Defence cooperation is expected to feature prominently alongside discussions on pharmaceuticals and efforts to accelerate India–European Union free trade negotiations.

This submarine initiative also reflects Germany’s evolving defence posture. Since the Russian invasion of Ukraine, Berlin has significantly expanded its defence industry output and reassessed its approach to strategic partnerships.

Willingness to share submarine technology, among the most sensitive domains in naval warfare, signals Germany’s intent to deepen ties with trusted partners like India while supporting efforts to reduce New Delhi’s reliance on Russian military equipment.

For India, the proposed deal fits squarely within the government’s broader indigenisation drive. Since 2020, New Delhi has restricted imports of major defence platforms, including fighter jets, helicopters, artillery, and warships, to compel foreign manufacturers to localise production and share technology.

Despite these measures, India remains the world’s second-largest importer of military hardware, sourcing a significant portion of its arsenal from abroad.

The potential Indo-German submarine agreement illustrates how India is attempting to balance this reality: continuing to work with global defence majors, but on terms that strengthen domestic manufacturing and long-term self-reliance.

By partnering with MDL, TKMS would embed German expertise within India’s shipbuilding ecosystem, creating spillover benefits for skills, supply chains, and future naval programmes.

Beyond industrial considerations, the deal carries clear geopolitical weight. Enhanced undersea capabilities would bolster India’s ability to monitor sea lanes, deter adversaries, and maintain strategic stability in the Indo-Pacific.

At the same time, it would elevate India–Germany defence relations from cooperation to co-production, signalling a deeper convergence of strategic interests.

If concluded, the submarine pact will stand as a defining moment in India’s defence diplomacy: one that combines scale, technology, and strategy to reshape the country’s maritime power for decades to come.

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