Germany and India are on the verge of finalizing a significant deal worth $5.2 billion to construct six submarines. This agreement comes as India seeks to diversify its sources of military equipment amid Russia’s ongoing conflict in Ukraine, which has raised concerns about its reliability as a primary supplier. Thyssenkrupp AG’s marine division and India’s Mazagon Dock Shipbuilders Limited are expected to collaborate on the project, with a preliminary agreement set to be signed in the presence of German Defense Minister Boris Pistorius during his visit to New Delhi. Pistorius emphasized the significance of this contract for both German industry and the strategic partnership between India and Germany.
The decision by Thyssenkrupp, based in Kiel, to engage in submarine manufacturing in India signifies a shift in its previous lack of interest when the tender was initially announced two years ago. The escalating conflict in Ukraine, coupled with China’s alignment with Russia, has led Germany and other Western nations to view India as a key player in countering China’s growing assertiveness in both military and diplomatic realms. India has identified Mazagon Dock Shipbuilders and Larsen & Toubro as potential partners for foreign defense companies in the construction of diesel attack submarines. Thyssenkrupp Marine Systems, known for its air independent propulsion technology, has been a particularly attractive choice due to its previous submarine supply to the Indian navy.
German Chancellor Olaf Scholz is encouraging German and European defense firms to enhance their contribution to India’s modern military needs, aiming to reduce India’s reliance on Russia for defense equipment. India, while maintaining its engagement with the United States and its allies, has continued to purchase discounted crude oil from Moscow. However, the ongoing border dispute with China has prompted India to seek military procurements from Russia, leading to challenges in payment mechanisms due to US sanctions.
The procurement of submarines is crucial for India as its current fleet is aging, with only 16 operational submarines out of the required minimum of 24 for effective patrolling of the Indian Ocean. Most of the fleet is over 30 years old and will be decommissioned in the coming years, except for the recently built vessels. India, as a member of the Quad grouping alongside Japan, the US, and Australia, has been advocating for technology-sharing among these countries and their European allies to develop submarines. However, concerns over technology transfer, given India’s proximity to Russia and its “Make in India” policy promoting domestic manufacturing, have limited progress in this regard.