India and Germany Near Landmark $8 Billion Submarine Deal

Germany and India are in advanced discussions on a submarine manufacturing deal valued at $8 billion or more, which could become India’s largest defence contract so far, according to Bloomberg. The negotiations are taking place ahead of German Chancellor Friedrich Merz’s first official visit to India next week. 

Manufacturing Arrangement 

Under the proposal, Germany’s Thyssenkrupp Marine Systems GmbH would partner with Mazagon Dock Shipbuilders Ltd. to build the submarines in India.  

The arrangement is expected to include the transfer of submarine-building technology, something India has not previously secured in similar deals. 

Technical Specifications 

The submarines would be fitted with air-independent propulsion (AIP) systems. These systems allow submarines to remain underwater for longer periods than conventional diesel-electric models. The capability is seen as relevant for extended patrols across the Indian Ocean region. 

India’s navy currently operates around 12 older Russian-origin submarines and six French-built Scorpène-class submarines.  

Defence Policy Context 

India has restricted imports of most major defence platforms since 2020 to encourage local manufacturing by foreign companies.  

Despite these measures, India remains the 2nd-largest importer of defence equipment globally, with Russia continuing to be its largest supplier, according to the Stockholm International Peace Research Institute. 

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Conclusion 

If completed, the submarine agreement would be a shift in India’s naval procurement, combining domestic production with foreign technology while adjusting its long-term sourcing strategy. 

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