By Zarak Khan | 2026-06-18

India is preparing to sign an estimated $8 billion agreement to domestically build a new fleet of German-designed Type-214 submarines, marking one of the country's most significant naval modernization efforts in decades.

The project, expected to be implemented under Project-75 India (P-75I), India's long-running military modernization program, would see advanced conventional submarines built in the country through a collaboration between German defense manufacturer ThyssenKrupp Marine Systems (TKMS) and state-owned Mazagon Dock Shipbuilders Ltd., according to defense industry officials.

In April, Indian Defense Minister Rajnath Singh and his German counterpart, Boris Pistorius, visited TKMS's shipbuilding facility in Kiel, highlighting the growing defense cooperation between the two countries and the strategic significance of the submarine program.

The deal is expected to be signed this summer, German broadcaster Deutsche Welle (DW) reported June 13, citing Pistorius.

Building capability

The agreement would represent one of the largest defense industrial partnerships between India and Germany and provide a major boost to New Delhi's efforts to strengthen indigenous military manufacturing while acquiring advanced naval technologies.

At the center of the deal is "the Transfer of Technology (ToT) related to the Air Independent Propulsion (AIP) system for the Type-214 submarines," according to a February analysis by the Observer Research Foundation (ORF), a New Delhi-based think-tank.

"An AIP-equipped submarine using fuel cell technology allows the vessel to remain submerged for extended periods while maintaining speed and stealth," ORF noted, highlighting the advantages such systems provide in contested maritime environments.

The technology is expected to significantly enhance the Indian navy's underwater warfare capabilities.

According to TKMS, the Type-214 is equipped with a fourth-generation fuel-cell-based AIP system and is designed for "surveillance and reconnaissance in littoral (coastal) environments, covert insertion missions and denial of access in strategic chokepoints."

With more than 11,000km of coastline and over 90% of its trade by volume transported by sea, India has a vested interest in securing key maritime routes and chokepoints across the Indian Ocean.

China factor

Indian officials have publicly framed the project as part of a broader naval modernization effort and a key component of the government's drive to expand domestic defense production.

However, analysts say the deal reflects New Delhi's concern over China's expanding maritime footprint across the Indian Ocean and the wider Indo-Pacific.

Over the past decade, China has steadily increased naval deployments in the Indian Ocean, including submarines, intelligence-gathering ships, research vessels and surface combatants.

Indian policymakers increasingly view these activities as part of a broader effort by Beijing to secure critical sea lanes that carry a significant share of global trade and energy supplies.

Concerns in New Delhi are further heightened by growing military cooperation between its main strategic rivals, China and Pakistan.

The acquisition of AIP technology under the long-delayed Project-75I program is intended to "address the problem of India's aging conventional submarine fleet," The Times of India reported in January.

The program is expected to "enhance [the] Indian Navy's underwater capabilities and strengthen maritime deterrence in the Indo-Pacific at the time both China and Pakistan are increasing their presence in the Indian Ocean Region," the newspaper reported.

India is focused on "securing the Indian Ocean region against threats from these two neighbors, as well as countering various non-traditional maritime-security challenges," according to the 2026 assessment of the International Institute for Strategic Studies, a global think-tank.

Germany's Indo-Pacific shift

For Germany, the proposed submarine agreement carries not only significant commercial value but also broader strategic heft as Berlin seeks more engagement in the Indo-Pacific.

"This deal is commercially important for Germany. But geopolitics is clearly the frame," Nina Haase, DW's chief political correspondent, told the broadcaster.

German policymakers have increasingly identified the Indo-Pacific as a center of global economic growth, technological competition and strategic rivalry.

A central objective of Berlin's Indo-Pacific strategy is the "diversification" of partnerships throughout the region, as part of efforts to reduce excessive economic dependence on China, according to Stiftung Wissenschaft und Politik, one of Germany's leading foreign policy think tanks.

"The concept of the Indo-Pacific is also a response to the rise of China and Beijing's associated claim to power in the region," the think-tank said in a 2024 analysis.

Germany's strategic shift toward the Indo-Pacific has become increasingly visible in recent years.

Haase also said supporting India's naval capabilities aligns with "Germany's broader interests in freedom of navigation, secure sea lanes and a rules-based order."

After a gap of almost two decades, Berlin resumed naval deployments to the region in 2021, sending the frigate Bayern on a seven-month mission focused on diplomacy, naval exercises and strengthening of partnerships across the Indo-Pacific.