New Delhi: India is on the cusp of finalising its largest defence contract in decades — an estimated $8 billion submarine manufacturing deal with Germany — as German Chancellor Friedrich Merz prepares for his first official visit to India on January 12–13, 2026.
The agreement, focused on the jointly produced P-75(I) conventional submarine project, is set to significantly bolster India’s undersea warfare capabilities and deepen strategic ties between New Delhi and Berlin.
Background of P-75(I) Submarine Deal
For years, India’s submarine fleet has struggled with capability and numbers. The Indian Navy currently fields a mixed underwater fleet that includes ageing Soviet-era Sindhughosh-class submarines — some well past their design lives — and a handful of newer conventional boats.
The gap between demand and supply has widened amid geopolitical tensions in the Indo-Pacific region, where Chinese submarine capabilities have grown significantly. Beijing’s growing undersea force projection makes it imperative for India to modernise and expand its own fleet.
The P-75(I) Submarine deal is designed to replace aging assets and ensure India’s undersea arm remains robust, stealthy and combat-ready into the 2030s.
Chancellor Merz’s official visit — including a scheduled meeting with Prime Minister Narendra Modi in Ahmedabad — creates a high-level political backdrop for sealing the landmark defence deal.
The two leaders are expected to take stock of the India–Germany Strategic Partnership, which last year marked its 25th anniversary, and explore cooperation across defence, trade, technology, and investment sectors.
The submarine deal negotiations have been progressing in recent months, with Indian and German officials aiming to finalise commercial and technical terms before or during this high-profile bilateral engagement.
What is the $8 Billion P-75(I) Submarine Deal
At the heart of the negotiations is Project 75 (India) — often shortened to P-75(I) — a long-awaited acquisition programme for six advanced diesel-electric submarines for the Indian Navy that incorporates Air-Independent Propulsion (AIP) systems. These submarines will be built locally in India in partnership with Germany’s ThyssenKrupp Marine Systems (TKMS) and India’s Mazagon Dock Shipbuilders Limited (MDL) under a “make in India” framework.
What are the Features of the P-75(I) Submarine
- Type 214 Conventional Diesel-Electric Design — a battle-tested class used by several navies worldwide.
- Air-Independent Propulsion (AIP) — enabling extended submerged endurance, significantly enhancing stealth and tactical endurance.
- Significant Technology Transfer — Germany is expected to transfer core submarine manufacturing technology to Indian firms for the first time, a critical step toward indigenous defence production.
- Local Content Mandates — initial submarines will contain at least 45 % indigenous content, rising to around 60 % in later units.
If finalised, the deal would mark a milestone in India’s defence acquisition history by combining industrial production with deep technology sharing — a major boost for local defence manufacturing.
What are the Implications of P-75(I) Submarine Deal
The prospective deal’s importance goes beyond simple hardware procurement. The expected technology transfer element and local manufacturing tie directly into India’s “Make in India” defence initiative, accelerating self-reliance in defence ecosystem capabilities.
Further, this agreement — alongside ongoing cooperation on semiconductor manufacturing, green technology, and trade discussions — signals a broader strategic alignment between India and Germany, aligning New Delhi’s Indo-Pacific vision with Berlin’s growing defence engagement outside Europe.
Timelines of the P-75(I) Submarine Deal
While some reports suggest the contract may be finalised during Merz’s visit, others note that negotiations are still being refined and may require additional time beyond the visit window.
If the P-75(I) contract is concluded, construction could begin later in 2026, with the first submarine projected to enter service by the early 2030s, based on earlier government timelines and projected delivery phases.
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