The Indian Navy has awarded a multi-billion dollar contract to Germany's Thyssenkrupp Marine Systems (TKMS) and the state-run Mazagon Dock Shipbuilders Limited (MDL) to build the next six conventional submarines with the newest stealth technologies in India.

The bid by Indian private firm Larsen and Toubro (L&T) and Spanish firm Navantia for the country’s submarine project, Project 75 India (P75I), was unsuccessful because it did not meet the technical requirement of having a proven Air-Independent Propulsion (AIP) system. In April last year, ThePrint reported that TKMS was the leading contender for the major contract, as an Indian Navy team visited Germany to evaluate the AIP system. The deal, expected to cost over ₹70,000 crore—significantly higher than the ₹43,000 crore benchmark set by the defence ministry as per the project’s Acceptance of Necessity (AON)—will involve TKMS designing an entirely new submarine to meet India’s specific requirements.

The design will be provided to the Indian Navy, which will use it to develop its own indigenous submarine under Project 76. Sources mentioned that after a mandatory 45-day period, during which contenders can challenge the decision, the bid submitted by MDL will be opened. Following this, cost negotiations for the formal contract will begin. However, this process means that there will be no competitive price discovery for the large-scale project. The first submarine under the P75I project is expected to be delivered within 7 years of signing the contract. So, if the contract is signed tomorrow, the earliest delivery would be in 2032. Sources revealed that the Indian Navy submitted its field evaluation trial (FET) report to the defence ministry late last year, confirming that the TKMS submarine meets the technical requirements. 

The Spanish government and L&T countered that they had also complied with Navy procedures and met the requirements. A three-member technical monitoring group was then established by the defence ministry to check for compliance with due process. There was one Air Commodore and one Brigadier-rank officer on the committee, which was led by a Rear Admiral. The committee issued its report earlier this month, according to the sources, stating that all due process was followed. The defense ministry therefore decided that the L&T-Navantia bid did not satisfy technical standards. The Navy plans to acquire six new diesel-electric submarines equipped with AIP (Air-Independent Propulsion) technology, enabling them to stay underwater for at least two weeks without surfacing, unlike conventional submarines that need to recharge batteries every two to three days.

During field evaluations, however, neither Germany nor Spain could demonstrate an AIP system that matched the size and capacity specified in the Navy's request for proposal (RFP). TKMS, on the other hand, had a proven AIP system installed in over 60 Type 214 submarines. Although its current size and capacity were smaller than the Navy's requirement, the company could scale up the system to suit the Indian Navy's demand for submarines with a displacement of 3,000 tonnes, compared to the 2,100-tonne displacement of the Type 214. Navantia does not yet have a fully operational, sea-tested AIP system. Although the AIP plant has been installed on its third S-80 class submarine for the Spanish Navy, the submarine is scheduled to be commissioned in 2026.

To demonstrate its AIP system, Navantia used a combination of land-based and onboard systems during the FET, which has undergone 50,000 hours of testing. However, the Indian Navy believed that this did not satisfy the standards of an AIP system that had been tested on the sea. The P75I project is a component of a 30-year plan to manufacture submarines that will conclude in 2030. 24 conventional submarines were originally planned, however, under the Narendra Modi administration, this was altered. To effectively deter China and Pakistan, the project would now construct 18 conventional submarines and six nuclear-powered submarines (SSNs).