India and Germany Edge Closer to Landmark $8 Billion Submarine Deal
By Cygnus | 08 Jan 2026
India and Germany are in the final stages of a historic submarine manufacturing agreement valued at approximately $8 billion (₹70,000 crore). Negotiations have surged ahead of German Chancellor Friedrich Merz’s first official visit to India, scheduled for January 12–13, 2026.
If finalized, the agreement—known as Project 75-I—would mark a tectonic shift in India’s defense procurement. For the first time, the deal includes a comprehensive design and technology transfer (ToT), allowing six Type 214 conventional submarines to be built entirely at the Mazagon Dock Shipbuilders Limited (MDL) yard in Mumbai.
A Strategic Multi-Supplier Strategy Contrary to earlier speculation that New Delhi might choose one partner over the other, the Ministry of Defence appears to be moving toward a dual-supplier model. While the German deal is the primary focus for the Navy’s next-generation “stealth” fleet, India is simultaneously finalizing a separate $4.3 billion deal with France for three additional Scorpene-class (Kalvari) submarines.
This two-pronged approach is designed to rapidly address India’s dwindling underwater arm, which currently operates only 16 conventional submarines against a Chinese fleet that has ballooned to over 70 vessels. The German-designed Type 214 vessels will feature Air-Independent Propulsion (AIP) technology, a critical upgrade that allows diesel-electric submarines to remain submerged for weeks rather than days, significantly reducing their acoustic and thermal signatures.
Merz’s Maiden Visit: A High-Stakes Itinerary Chancellor Merz will be received by Prime Minister Modi in Ahmedabad on January 12—a symbolic nod to the “Make in India” defense corridor—before traveling to Bengaluru the following day. While defense is the cornerstone of the visit, the Chancellor is accompanied by a massive delegation of German CEOs focusing on:
- Green Hydrogen: Advancing the Indo-German Green and Sustainable Development Partnership.
- Semiconductor Sovereignty: Exploring joint ventures in chip design and advanced manufacturing in Bengaluru.
- Trade: Finalizing the roadmap for the India-EU Free Trade Agreement (FTA) summit later this month.
Summary
India and Germany are nearing the finish line on an $8 billion submarine deal involving TKMS and Mazagon Dock for six advanced Type 214 subs. This deal, alongside a parallel French Scorpene project, underscores India’s push for a “blue-water” navy capable of countering regional threats. Chancellor Merz’s visit next week provides the necessary political impetus to transition from years of negotiation to active construction in Mumbai.
Frequently Asked Questions (FAQs)
Q1: Will the German deal replace the French Scorpene project?
No. India is pursuing a “split fleet” strategy. The German Type 214 is for the high-end Project 75-I, while the French deal is a follow-on to maintain existing production lines for the Kalvari-class.
Q2: What is AIP technology?
Air-Independent Propulsion allows a submarine to operate its motor without access to atmospheric oxygen. This means the sub can stay submerged for up to three weeks, making it nearly impossible to detect.
Q3: When will construction start?
If the deal is inked during the Merz visit, initial steel cutting at MDL is expected by late 2026, with the first vessel likely entering trials in 2031.
Q4: Why is the EU FTA mentioned?
Germany is India’s largest trading partner in Europe. Chancellor Merz is using the submarine deal as a “strategic anchor” to push for broader market access and reduced tariffs under the India-EU FTA.