Mazagon Dock Soars on Report of Clearance for $8.7 Billion P-75I Submarine Contract

Next-Generation Submarine Project Clears Finance Ministry Hurdle

Shares of Mazagon Dock Shipbuilders Ltd were trading higher in noon trade on May 29, amid reports that the finance ministry has approved the ambitious Rs 70,000 crore next-generation submarine project. The project, codenamed Project-75I, involves India and Germany jointly manufacturing six advanced submarines.

According to a May 29 report by Hindustan Times, the Nirmala Sitharaman-led ministry has cleared the deal, which will see Mazagon Dock Shipbuilders partner with Germany's thyssenkrupp Marine Systems (tkMS) for the project. As per the NSE, shares of Mazagon Dock were trading 3.12% higher at Rs 2,531.80 at 11:24 am.

The first submarine under the Project-75I programme is expected to be delivered to the Indian Navy seven years after the signing of the contract, with the remaining five submarines expected to be inducted at the rate of one vessel per year thereafter. The advanced submarines, based on the HDW Class 214 design, will be equipped with air-independent propulsion (AIP) systems, which significantly enhance underwater endurance while reducing the chances of detection.

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As part of the agreement, tkMS will transfer submarine design and technology to India, supporting the country's push towards self-reliance in defence manufacturing. The MDL-tkMS partnership secured the project after beating the rival bid from the Larsen & Toubro Limited-Navantia combine.

The localisation roadmap for the project requires the first P-75I submarine to have a minimum indigenous content of 45%, which will gradually rise to 60% by the sixth submarine. The Indian Navy aims to achieve complete self-reliance by 2047, when India marks 100 years of independence. Around 60 warships are currently under construction at various Indian shipyards.

The P-75I programme is also expected to strengthen defence ties between India and Germany. In April, the two countries signed a defence industrial cooperation roadmap during talks between Defence Minister Rajnath Singh and German Defence Minister Boris Pistorius in Berlin. The agreement aims to promote joint development and co-production of defence equipment while deepening bilateral military cooperation between the two countries.

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Note: The table above highlights the number of warships currently under construction in Indian shipyards, and the target of achieving complete self-reliance by 2047.