Negotiations Begin on P 75(I) Submarine Deal, Signing Still a Long Haul

India’s stalled plan to modernise its submarine fleet has finally crossed into a decisive stage, with official contract negotiations now underway between Mazagon Dock Shipbuilders Ltd (MDL) and Germany’s ThyssenKrupp Marine Systems (TKMS) for the ambitious Project 75(I). The programme, valued at over Rs 70,000 crore, envisions building six next-generation conventional submarines based on German design and technology.

The project will be executed under the Strategic Partnership (SP) model, pairing MDL with Germany’s ThyssenKrupp Marine Systems (TKMS) — a tie-up widely seen as one of the most technologically challenging ventures under the ‘Make in India’ defence drive.

Negotiations Begin After Delays

The announcement from TKMS that it has entered formal negotiations with MDL marks a long-awaited breakthrough. However, insiders caution that the final contract remains some distance away. The Contract Negotiation Committee (CNC) has only just been constituted, and talks will need to resolve thorny issues around pricing, technology transfer guarantees, and the level of indigenous manufacturing content.

Defence officials attribute the delayed start partly to the government’s preoccupation with Operation Sindoor, which temporarily drew focus away from big-ticket procurement programmes. Despite that, sources remain optimistic that the negotiation phase could conclude before the close of the current financial year, clearing the path for actual execution from mid-2026.

Caution Amid Optimism

Officials stress that entering the negotiation phase should not be mistaken for an imminent signing. “Negotiations are a critical step, but they don’t equate to a done deal,” a senior MoD official noted. “There is still substantial ground to cover before the contract can be inked.”

If finalised, Project 75(I) would mark a major leap in India’s undersea warfare capabilities at a time when the Navy’s submarine fleet is dwindling and China’s presence in the Indian Ocean is expanding.

Technology Transfer, AIP Systems Key to Strategic Edge

At the heart of Project 75(I) is the promise of full technology transfer and the integration of Air Independent Propulsion (AIP) systems, which will significantly enhance the submarines’ underwater endurance and stealth capabilities—crucial assets in the Indo-Pacific’s evolving maritime threat landscape.

“Our partnership with MDL is built on trust, innovation, and a long-term vision,” said Oliver Burkhard, CEO of TKMS. “We’re committed to transferring critical technology and enabling India to become a hub for submarine manufacturing—not just for its own navy but also for friendly navies around the world.”

The CNC comprises officials from the MoD, Navy, Defence Finance, and MDL. Once formalised, two separate contracts will be signed—one between the MoD and MDL, and another between MDL and TKMS. These will outline workshare, timelines, and technology transfer obligations. Sources stress that “actual design knowledge must be transferred to India, enabling future indigenous production without foreign support.”

Strategic Industry Tie-ups to Bolster Local Capability

In line with India’s defence indigenisation goals, TKMS has formed strategic collaborations with Indian defence companies to ensure significant localisation of key systems:

• VEM Technologies (Hyderabad): MoU signed to develop and integrate heavyweight torpedoes with support from TKMS’s German subsidiary, Atlas Elektronik. The project will include local assembly and testing.
• CFF Fluid Control Ltd: Partnership expanded to enable domestic production of towed sonar systems, a critical component in anti-submarine warfare (ASW).

Both partnerships are designed to ensure that a significant share of submarine subsystems is produced or assembled within India, reducing dependency on foreign suppliers and creating sustainable defence manufacturing infrastructure.

Learning from the Past

Project 75(I) has already seen substantial delays—the Expression of Interest (EoI) was issued back in 2019. Defence planners are wary of repeating the mistakes of Project 75 (Scorpene), where the collaboration with France’s Naval Group led to major cost and time overruns.

Originally signed in 2005 for Rs 18,706 crore, the Scorpene contract ballooned to over Rs23,000 crore. The first submarine was inducted only in 2017—five years behind schedule—and the last, INS Vagsheer, entered service as late as January 2025, nearly two decades after the contract was inked.

“The Scorpene delays are a hard lesson,” a senior Navy official said. “The key now is ensuring that the transfer of technology from TKMS is real and actionable, so that the next class of submarines can be entirely Indian-built—from design to deployment.”

Reviving Lost Expertise

India had previously manufactured two German-designed HDW submarines in the early 1990s, but a subsequent 11-year gap led to the loss of critical submarine-building expertise. Project 75(I) aims to not only regain that capability but also lay the groundwork for India to become a self-sufficient submarine production hub.

Strategic experts warn that from the day the contract is signed, it would still take seven to eight years to induct the first submarine. If the agreement is finalised this FY, the first Project 75(I) submarine will likely be inducted around 2032.

Geopolitical Context and German Support

The revival of Project 75(I) comes at a time of deepening Indo-German defence ties. A recent visit by German Foreign Minister Johann Wadephul highlighted Berlin’s strong support for India’s goal of building a robust, self-reliant defence industrial base.

“Germany fully supports India’s ambition to build a strong, self-reliant defence industrial base,” Wadephul said during a press interaction with External Affairs Minister S. Jaishankar. “Our cooperation on submarines is just one example of what we can achieve together.”

In addition to submarine collaboration, the two countries are also engaged in broader talks around maritime security, regional stability, and the long-stalled India-EU Free Trade Agreement.

What Lies Ahead

If negotiations conclude as expected by March 2026, the formal contract signing will allow construction to begin shortly after. Key components of the programme include:

• Full technology transfer from TKMS to Indian partners
• Localised production of propulsion systems, sonar arrays, and weapon platforms
• Establishment of new production and testing facilities
• Strategic export opportunities in collaboration with friendly navies

Defence planners are hopeful that Project 75(I) will not only bolster India’s naval capabilities but also serve as a turning point in building a world-class indigenous submarine manufacturing ecosystem.

Huma Siddiqui