New Delhi: India and Germany are moving toward what could become the largest defence agreement New Delhi has ever signed. The two countries are preparing to sign a submarine deal worth about $8 billion. The agreement is expected to be signed ahead of German Chancellor Friedrich Merz’s upcoming visit to India.
Officials familiar with the discussions say the negotiations focus on building advanced submarines. It will be a significant moment in India’s naval modernisation plans. If finalised, this would surpass all previous defence contracts signed by New Delhi.
India presently operates submarines sourced from Russia and France, making the scale and direction of this proposed partnership with Germany a major strategic shift.
Technology Transfer
According to a Bloomberg report, the India-Germany talks centre on an $8 billion defence agreement that goes beyond procurement. Sources say the deal includes transfer of submarine construction technology to India, a first of its kind at this scale.
Work on finalising the framework is underway as Chancellor Merz prepares for his India visit next week.
This technology-sharing component is seen as an important element, aligning with India’s push to strengthen domestic defence manufacturing and reduce long-term dependence on foreign-built platforms.
Make In India
At present, the Indian Navy operates around a dozen submarines of Russian origin and has inducted six newer vessels built in France. The report says that if the German deal goes through, India may reconsider its plan to acquire three additional submarines from France.
Under the proposed arrangement, the submarines would be built in India through a partnership between Germany’s ThyssenKrupp Marine Systems GmbH and India’s Mazagon Dock Shipbuilders Limited, combining Berlin design with New Delhi’s shipbuilding capacity.
Merz’s Visit To India
Chancellor Merz is set to visit India for the first time on Monday, January 12, 2026. His trip begins in Ahmedabad, Gujarat, where he is scheduled to meet Prime Minister Narendra Modi. From there, he will travel to Bengaluru.
The visit is expected to deepen cooperation between the two countries across sectors, including defence and pharmaceuticals. Discussions are also likely to cover efforts to speed up negotiations on a free-trade agreement between India and the European Union.
Built To Stay Underwater Longer
The new submarines under discussion would be equipped with Air-Independent Propulsion (AIP) systems, a technology that enhances underwater endurance. Compared to conventional diesel-electric submarines, AIP-equipped vessels can remain submerged for much longer periods, improving stealth and operational reach.
ThyssenKrupp Marine Systems has declined to comment on the report. The Ministry of Defence and the Ministry of External Affairs have also not issued statements on the proposed deal.
If concluded, the agreement would signal a new chapter in India-Germany strategic ties and change the future of India’s underwater warfare capabilities.
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