MDL to Begin Negotiations with MoD on January 27 for India’s Biggest-Ever Submarine Deal

Mumbai, India - Mazagon Dock Shipbuilders Limited (MDL), India's leading public sector shipyard, announced on Thursday that it has been invited by the Ministry of Defence (MoD) for commercial negotiations on the ambitious ₹70,000 crore Project-75 India (P-75I) submarine deal. The negotiations, scheduled to commence on January 27, 2025, follow the opening of commercial bids on January 16, 2025, as per an official statement released to the Bombay Stock Exchange (BSE).

"Indian Navy/Defence Ministry today (23.01.2025) has now invited MDL for the first round of commercial negotiations to be held on 27.01.2025," the statement read, affirming that MDL's bid had been opened and is under further processing.

Project-75 India: The Biggest Defence Procurement Deal

The ₹70,000 crore Project-75 India is the largest-ever defence procurement contract by value and aims to equip the Indian Navy with six advanced submarines featuring next-generation Air Independent Propulsion (AIP) systems. These submarines are expected to enhance India's underwater endurance and operational capabilities, allowing extended submerged missions of up to three weeks—a critical requirement to counter China's growing naval assertiveness in the Indian Ocean region.

Earlier this month, the Ministry of Defence disqualified the bid submitted by Larsen & Toubro (L&T) in partnership with Spanish firm Navantia, citing non-compliance with the Indian Navy's stringent requirements. Defence sources revealed that while L&T's proposed AIP system was demonstrated successfully in Spain under controlled conditions, the Navy insisted on a "sea-proven system," which L&T and Navantia failed to provide.

With L&T out of the race, MDL, in collaboration with Germany’s ThyssenKrupp Marine Systems (TKMS), remains the sole contender for the lucrative contract. MDL's long-standing experience in submarine manufacturing under the earlier Project-75 (Scorpene-class) program strengthens its position in securing the P-75I deal.

MDL’s Track Record and Ongoing Projects

MDL recently delivered the INS Vagsheer, the final of the six Scorpene-class submarines under the original Project-75 initiative, to the Indian Navy. The shipyard is also set to undertake an additional order of three more Scorpene-class submarines, in collaboration with France’s Naval Group, under the Project-75 (Additional Submarines) program.

Given the Indian Navy’s urgent need to bolster its undersea fleet, defence officials have proposed splitting the P-75I project among shipyards to expedite delivery timelines and balance workload distribution. However, MoD sources indicate that MDL remains the primary contender due to its infrastructure and expertise.

India's Pursuit of Advanced Submarine Capabilities

India's pursuit of advanced submarine capabilities comes against the backdrop of the rapid modernization of China’s People's Liberation Army Navy (PLA-N), which has significantly expanded its undersea warfare capabilities. Additionally, the growing presence of the Chinese navy in the Indian Ocean, combined with potential threats from Pakistan’s expanding maritime force, underscores the strategic necessity of the P-75I project.

The delay in finalizing the deal has raised concerns within the defence establishment, as the Indian Navy currently faces a depleting fleet strength, with aging conventional submarines struggling to match regional adversaries' capabilities. Industry experts warn that India's submarine fleet must be modernized swiftly to avoid operational handicaps in potential conflicts.

Despite challenges, the Indian government has been pushing forward with multiple submarine acquisition programs, including both conventional and nuclear platforms, to achieve self-reliance under the "Aatmanirbhar Bharat" initiative. The Defence Ministry's focus remains on ensuring that the P-75I project progresses without further delays.