India moves closer to an $8 billion deal for six submarines with Germany.

India and Germany are close to concluding a submarine manufacturing agreement valued at a minimum of $8 billion, which centers on the joint construction of six conventionally powered submarines in India, with full technology transfer.

As reported by Bloomberg on January 8, 2026, India and Germany are close to concluding an $8 billion submarine manufacturing agreement ahead of German Chancellor Friedrich Merz’s planned visit on January 12 and January 13, 2026. The deal, if finalized, could involve the local construction of six air-independent propulsion (AIP)-equipped conventional submarines in Mumbai under the Project-75(I) program, with full technology transfer in a major shift in India’s submarine procurement strategy.
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The Type 214 class is the submarine most consistently linked by media to the current phase of the P-75(I), a program valued at roughly $8.3 billion, aligning closely with the value discussed in the current India-Germany talks. (Picture source: Wikimedia/GDK)

India and Germany moved closer to concluding a submarine manufacturing agreement valued at no less than $8 billion, equivalent to about €6.9 billion, structured around the joint construction of six conventionally powered submarines in India. The negotiations accelerated ahead of German Chancellor Friedrich Merz’s planned visit to India on January 12 and January 13, 2026, and could represent the largest defense industrial project ever pursued by New Delhi. A central feature of the prospective agreement is the inclusion of a full technology transfer for submarine production, something that has not previously been part of submarine cooperation between the two countries.

The industrial structure under discussion would link Germany’s Thyssenkrupp Marine Systems with India’s state-owned Mazagon Dock Shipbuilders (MDL), with construction centered at MDL’s facilities in Mumbai. The submarines would be built locally rather than delivered as finished imports, reflecting India’s policy direction since 2020 to limit foreign procurement of major defense platforms to force localization of production. The overall value of the project reflects not only the hulls and combat systems but also the transfer of design and production know-how associated with one of the most complex categories of naval vessels. Within India’s broader procurement planning, the German program is also linked to a reassessment of follow-on purchases of French Scorpène-class submarines (already operated by the Indian Navy under as the Kalvari-class), with indications that a separate plan for three additional French boats could be set aside if the German deal proceeds.

The negotiations with Germany are directly tied to the Project-75 (India), commonly referred to as the P-75(I) program, which is structured around the acquisition of six conventionally powered attack submarines with air-independent propulsion (AIP) as a mandatory feature. An AIP system allows a conventional submarine to remain submerged for extended periods without surfacing, improving endurance and reducing exposure during patrols. India’s existing conventional submarine fleet is under increasing pressure from age, with a force level of 16 boats and a significant portion exceeding 30 years in service, alongside six newer French-built submarines. This aging profile has created a capability gap at the conventional level, which the P-75(I) program is meant to address while longer-term nuclear-powered Arihant-class submarine plans continue separately. In this context, an AIP-equipped conventional submarine is treated as a near-term requirement rather than a transitional option.

The P-75(I) program is widely associated with a cost figure of about ₹70,000 crore, or roughly $8.3 billion, aligning closely with the value discussed in the current India-Germany talks. Like many other defense projects in India, the P-75(I) has a long and complex history marked by delays, shifting industrial frameworks, and evolving technical requirements, but its core objective has remained the same, namely to replace aging submarines while embedding foreign design expertise within Indian shipyards. The Type 214 class is the submarine most consistently linked by media to the current phase of the P-75(I), with German engineering input combined with Indian construction and delivery responsibility. Furthermore, this class of submarine is already in service with several navies, including Greece, Turkey, South Korea, and Portugal. The P-75(I) requirement space also points to a larger displacement of about 3,000 tonnes, indicating that any Indian-built Type 214 variant would be adapted to national specifications rather than copied directly from existing foreign operators.

The Type 214 was developed by Thyssenkrupp Marine Systems (TKMS) in the late 1990s and early 2000s, based on experience gained with the earlier Type 209 and experimental Type 212 programs. Unlike the Type 212, which was initially reserved for the German and Italian navies, the Type 214 was conceived specifically for export customers that required advanced endurance and stealth but did not have access to nuclear propulsion, combining proven German design with flexibility for customer-specific combat systems and weapons. The first contracts were secured in the early 2000s, with Greece becoming the launch customer, followed later by orders from South Korea, Turkey, and Portugal. Over time, the program evolved through successive batches, incorporating incremental refinements in propulsion integration, noise reduction, and combat system compatibility, while maintaining a common design lineage.

From a technical perspective, the Type 214 is characterized by a diesel-electric propulsion system supplemented by a fuel-cell-based AIP system, which supplements conventional diesel generators and battery systems. Typical configurations place the submarine in the 1,700 to 2,000 tonne displacement class when surfaced, with a length generally cited in the low-80-meter range and a beam optimized for hydrodynamic efficiency and low acoustic signature. Propulsion is provided by a single shaft driven by an electric motor, with AIP enabling submerged endurance measured in weeks rather than days under low-speed patrol conditions. Armament is centered on multiple bow-mounted 533 mm torpedo tubes, allowing the use of heavyweight torpedoes as well as anti-ship missiles launched from the tubes, and the internal layout supports a mixed weapons load depending on mission requirements. Performance figures commonly associated with the class include maximum diving depths close to 400 meters and operating profiles optimized for anti-surface and anti-submarine warfare, intelligence collection, and sea denial missions in both open-ocean and littoral environments.

The political context of the negotiations is closely linked to Chancellor Merz’s first official visit to India, which includes meetings with Prime Minister Narendra Modi in Gujarat, followed by travel to Bengaluru, India’s main technology hub. Defense cooperation forms one pillar of the visit, but it is embedded in a wider agenda that includes pharmaceuticals, industrial partnerships, and renewed momentum behind negotiations on a European Union-India free trade agreement. Merz is accompanied by a large delegation of German business leaders, underlining the economic dimension of the trip, and a separate China visit with another business delegation has been mentioned without a confirmed date. The submarine project is therefore positioned not only as a military acquisition but also as a strategic industrial anchor for broader bilateral relations.

At the strategic level, the proposed submarines are intended to strengthen India’s ability to monitor and control large areas of the Indian Ocean at a time when China is expanding its naval activity in the region. For New Delhi, the agreement supports a dual objective of improving underwater capabilities while reducing long-term dependence on Russian-origin equipment, which still accounts for a large share of India’s military inventory despite diversification efforts. For Berlin, the willingness to transfer advanced submarine production know-how reflects a broader shift in defense industrial policy following the security changes triggered by the war in Ukraine and Germany’s subsequent expansion of defense manufacturing. If finalized during or shortly after Merz’s January 2026 visit, the agreement would represent a structural change in Indo-German defense cooperation, combining fleet renewal, industrial localization, and long-term strategic alignment.

Written by Jérôme Brahy

Jérôme Brahy is a defense analyst and documentalist at Army Recognition. He specializes in naval modernization, aviation, drones, armored vehicles, and artillery, with a focus on strategic developments in the United States, China, Ukraine, Russia, Türkiye, and Belgium. His analyses go beyond the facts, providing context, identifying key actors, and explaining why defense news matters on a global scale.