German, Indian defence majors near deal to build submarine in India

Thyssenkrupp AG's marine arm and Mazagon Dock Shipbuilders Limited are likely to jointly bid for an approximate $5.2 billion project to build six submarines for the Indian navy

Germany and India are closing in on a $5.2 billion deal to build diesel submarines in India, reported Economic Times (ET) on Tuesday.       

German Chancellor Olaf Scholz asked German and European defence majors to supply New Delhi with modern military gear making a way for India to gradually remove its dependence on Russia in the defence sector.

Russia-Ukraine war pushed New Delhi to expand its military cooperation beyond its top supplier Moscow. German company Thyssenkrupp AG’s marine arm and India's Mazagon Dock Shipbuilders Limited are likely to jointly bid for an approximate $5.2 billion project to build six submarines for the Indian navy, said Economic Times report citing sources.

"The preliminary agreement or memorandum of understanding (MoU) will be signed in the presence of German Defence Minister Boris Pistorius who arrived in New Delhi on Tuesday for a two-day visit," said German and Indian officials to ET.

"Submarine deal will be on the agenda when he visits Mumbai Wednesday," Pistorius told German broadcaster ARD.

“This would be a big and important contract not only for German industry but also for India and the Indian-German strategic partnership,” Pistorius said.

When the tender was announced two years ago, the German defence manufacturer showed no interest in jointly manufacturing submarines in India. Now with the war in Ukraine in its second year and China moving closer to Russia, the West is placing its bets on India.

India has identified Mazagon Dock Shipbuilders and Larsen & Toubro to tie up with foreign defence manufacturing companies to build diesel submarines. A key prospect for a partnership had been Thyssenkrupp Marine Systems as it is one of two submarine manufacturers globally to have air-independent propulsion, a technology that helps conventional submarines stay underwater for longer.

The Indian navy needs a minimum of 24 conventional submarines, to effectively patrol the Indian Ocean, but currently, it has only 16. Out of this, ten submarines are over 30 years old and likely to be decommissioned in years to come.

India has been pushing Quad countries and European allies to share technology to build submarines. However, there’s been a reluctance to transfer technology due to India’s proximity to Russia.