India, Germany near $8 billion submarine agreement

By Admin

09 Jan, 2026

Introduction
India and Germany are close to finalising a landmark submarine manufacturing agreement valued at nearly $8 billion, which would become the largest defence deal ever signed by New Delhi. The agreement signals a major shift in India’s naval modernisation strategy and reflects a deepening strategic partnership between the two nations.

Deal overview and strategic timing
The agreement is being negotiated ahead of German Chancellor Friedrich Merz’s maiden visit to India. During his trip, Merz is scheduled to meet Prime Minister Narendra Modi in Gujarat before travelling to Bengaluru to engage with German companies operating in India. The timing highlights the growing political and economic alignment between the two countries.

Submarine manufacturing and technology transfer
A key feature of the proposed deal is the transfer of advanced submarine manufacturing technology to India for the first time. Germany’s Thyssenkrupp Marine Systems GmbH is expected to partner with India’s state-owned Mazagon Dock Shipbuilders Ltd. to build the submarines domestically. This collaboration supports India’s long-term goal of strengthening indigenous defence production under its self-reliance initiatives.

Impact on India’s naval fleet
India’s Navy currently operates around a dozen ageing Russian-origin submarines along with six newer French-built models. If the Germany deal proceeds, India is expected to drop plans to acquire three additional French submarines. The new vessels will feature air-independent propulsion systems, enabling them to remain submerged longer and significantly improving endurance compared to conventional diesel-electric submarines.

Strengthening presence in the Indian Ocean
These advanced submarines will enhance India’s maritime surveillance and deterrence capabilities across the Indian Ocean region, particularly as China expands its naval footprint. Improved underwater endurance and stealth will allow the Indian Navy to better safeguard sea lanes and strategic interests.

Broader defence and economic cooperation
Beyond defence, India and Germany are also expected to expand cooperation in sectors such as pharmaceuticals. Chancellor Merz is likely to use his discussions with Modi to push forward negotiations between the European Union and India on a long-pending free trade agreement. His India visit will include a large delegation of German CEOs, underlining Berlin’s focus on deepening economic ties with New Delhi.

Reducing dependence on Russian defence imports
India remains the world’s second-largest importer of military equipment, sourcing much of it from Russia, according to Stockholm International Peace Research Institute. Germany’s willingness to share sensitive submarine technology reflects a broader strategic objective to reduce India’s reliance on Russian defence systems, especially after Germany’s defence sector expanded rapidly following Russia’s invasion of Ukraine.

Conclusion
The proposed India–Germany submarine agreement represents a transformative moment for India’s defence manufacturing landscape. With technology transfer, domestic production, and enhanced naval capabilities at its core, the deal underscores a new phase of strategic trust and cooperation between the two nations while reshaping India’s role in regional maritime security.