Two major European defence companies are vying for a lucrative contract worth Rs 400 billion ($4.8 billion) to build submarines in India. This move comes as the South Asian nation seeks to strengthen its naval power in response to China's growing maritime influence in the Indo-Pacific region.

Officials from India are currently reviewing competing proposals for the construction of six submarines domestically. These high-ranking Indian officials, who are aware of the developments but wish to remain anonymous due to the sensitive nature of the discussions, revealed that one bid is a partnership between Germany's Thyssenkrupp AG and Mumbai-based Mazagon Dock Shipbuilders Limited. The other bid is a collaboration between the Spanish Navantia and the private shipyard Larsen & Toubro.

The Indian Navy is prioritizing the purchase of the most advanced and substantial technology transfer package available, as confirmed by the insiders. The Ministry of Defence, in its announcement of the tender in July, outlined its expectations for sharing significant technology with Indian shipyards, along with the integration of air-independent propulsion technology into the submarines, allowing them to operate underwater for extended periods of time.

With Russia, traditionally India's main supplier of military equipment, facing challenges due to its involvement in the conflict in Ukraine and subsequent sanctions, India is actively seeking reliable alternatives to its military hardware. This situation has prompted India, a member of the Quad alliance alongside Japan, the United States and Australia, to position itself as a hub for manufacturing and technology transfer in the field of complex defense systems, including submarines and fighter aircraft.

The overarching goal is to gradually build domestic capabilities for the indigenous production of advanced weapons systems. To this end, the Indian Ministry of Defence has stressed the need to expand its submarine fleet, which currently stands at 16 submarines, despite the government's claim that a minimum of 24 submarines is required. Most of the existing submarines are more than three decades old and are expected to retire in the coming years.