Cost of German U-214NG Subs Under Indian Navy's Project-75I Skyrocket to $1.3B Per Unit, Putting Deal in Limbo

A crucial Indian Navy programme to acquire six advanced submarines, known as Project-75I, is facing significant uncertainty as the price for the chosen vessel has escalated dramatically.

The per-unit cost of the German-engineered U-214NG submarine has reportedly climbed to approximately $1.3 billion, a steep rise from the initial 2021 estimate of $800 million.

This price increase has pushed the total projected cost for the six submarines to nearly ₹70,000 crore (approx. $8.4 billion), substantially higher than the ₹43,000 crore allocated by the government over a decade ago.

According to defence analysts, this surge is a result of global inflation, fluctuations in currency exchange rates, and the integration of sophisticated new technologies. A key factor in the cost is the inclusion of an Air Independent Propulsion (AIP) system, which will be supported by Indian industry.

The journey of Project-75I, which was first approved by the Ministry of Defence in November 2007, has been long and complex.

A central requirement from the Indian Navy was that any submarine must have a sea-proven AIP system. An AIP system is a critical technology that allows conventional submarines to remain submerged for weeks at a time, drastically reducing their chances of detection compared to older designs that must surface every few days to run diesel engines to recharge their batteries.

This strict condition led several international submarine manufacturers to withdraw from the tender process. Contenders such as France’s Naval Group, Spain’s Navantia, and Russia’s Rubin Design Bureau found the terms difficult to meet, with the Russian firm calling the tender "unrealistic."

South Korea's Daewoo Shipbuilding & Marine Engineering also exited the competition, leaving Germany’s ThyssenKrupp Marine Systems (TKMS) as the only viable bidder. TKMS has partnered with India’s state-owned Mazagon Dock Shipbuilders Limited (MDL) for the project.

The offered U-214NG is an advanced variant of the proven Type 214 submarine, featuring modern stealth capabilities, superior sensors, and a fuel-cell based AIP module for extended underwater endurance.

Despite TKMS-MDL emerging as the winner earlier this year, the Ministry of Defence has reportedly not proceeded with formal cost negotiations since January, indicating serious concerns over the revised pricing.

This pause comes as DRDO has successfully developed and tested its own indigenous fuel cell-based AIP system. This system is slated to be retrofitted onto India's existing Kalvari-class (Scorpène) submarines, demonstrating a growing domestic capability.

If the deal for the German submarines proceeds at the current price, Project-75I would become India’s most expensive single defence import. For comparison, the earlier Project-75, which produced six Kalvari-class submarines in collaboration with France, cost significantly less.

The Ministry of Defence is now at a critical juncture. The Indian Navy urgently needs to replace its ageing fleet of Sindhughosh-class (Russian-origin Kilo-class) and Shishumar-class (German-origin Type 209) submarines, some of which have been in service for over 35 years.

The decision now rests between acquiring a highly capable but extremely expensive foreign platform or pivoting towards an indigenous solution that could strengthen self-reliance but may face its own developmental timelines.

 

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[noZonedHuman]

We chase the end product too much rather than building core foundational capacity.

That's not how you become self reliant

 

[priyanshu3657]

We should go with navantia and L&Ts SUBMARINES they are a bit cheaper and also have better AIP systems which might allow it's endurance to be more than 50 days

 

[sanket]

This is what Western OEMs do after winning the deal. Similar experience in the Rafale deal too in MMRCA. Scrapped the P-75I and went for an Indigenous Submarine project. Anyway, this project was taking a long time for the selection of a winner.

 

[Mithu Roy]

We are wasting taxpayers' money on these costly toys without getting technology, nor are we able to absorb any. It's better to get another six Scorpenes with 100 percent technology ToT from France with Indian AIP. Then, take German consultation to build an indigenous sub instead of going for these costly subs. If we are able to design nuclear attack subs, then put every penny into it and master the technology.

 

[Anonymus]

Why not buy more Scorpène subs rather than buying different subs from another country? We already paid France for TOT, so invest in building manufacturing and a supply chain for these subs. I think giving additional orders for these subs will cost less compared to the German ones.

Although, there is no point in talking over it as the P75I tender was won by Germany's TKMS, and cost negotiations are in advanced stages, so somehow U214 will be acquired.

 

[Anant]

Why not buy more Scorpène subs rather than buying different subs from another country? We already paid France for TOT, so invest in building manufacturing and a supply chain for these subs. I think giving additional orders for these subs will cost less compared to the German ones.

Although, there is no point in talking over it as the P75I tender was won by Germany's TKMS, and cost negotiations are in advanced stages, so somehow U214 will be acquired.

The Scorpenes are costing us a bit more than these are. The present indications are Rs. 70,000 crores for six boats under P-75(I) and Rs. 36,000 crores for three boats under P-75(AS).

 

[Arz786]

Quick back-of-the-envelope calculation tells that 1 Euro = Rs 68 in 2015 and 1 Euro = Rs 101 today. That means the price quoted in Euro will have increased by 1.5 times because of the exchange rate alone. So, 43,000 Cr (estimate in 2015) will have become Rs 65,000 Cr. Therefore, if Germans are asking for Rs 70,000 Cr, that does not appear out of whack.

 

[PARASHURAM]

If you don't have funds, please launch an investment plan for all citizens to fund defence technologies and set up a huge defence industrial complex. We, the people of India, will support this initiative.

 

[DB_NE_Guy]

Good. Very good. Yet to be negotiated and keep it delaying until 2030. It is Navy's version of MRFA imbroglio.

Our defence budget is barely increasing if inflation is counted. Yet babus here are waging secret war on India by delaying it which causes strain on our meagre defence budget.

 

[Chinese eater]

Stop giving freebies like houses, grains, medical aid, and electricity. Nowadays, it has become difficult to find labourers or staff. Just sitting at home, they get money for houses, separate money for bathrooms, free water, no electricity bill, and free rations. If all these things are given free along with reservations, why would they work?

 

[sas]

This is nothing but daylight robbery. $1.3 billion for a conventional submarine is simply not acceptable. Better use that to buy a few more Rafales or Sukhois; it will give far more strategic benefit. Or, put that $1.3 billion into research in the private sector of India; they will produce those technologies and we can manufacture our own.

 

[Baiju Bhaskaran]

If we are paying 36,000 crores for three new Scorpene submarines, then 70,000 crores for six U-214 NG submarines is a reasonable deal. This should be finalised fast, before any new cost escalation takes place.

 

[Mango_Indian]

To put this in perspective, upgraded Arihant-class 7,000-tonne nuclear submarines, S4 and S5, are cheaper than a U214. And their indigenization levels are greater than 60% today as we are making the reactor in India. So, we could buy six units of upgraded Arihant class instead of U214.

Russian upgraded Kilo 636.3 class, after integrating the DRDO AIP with it, looks like a better option. It is a 4,000-tonne highly upgraded version of the Kilo class which is more silent, has a higher range, and can fire ballistic missiles from its torpedo tubes. Ironically, buying it directly from Russia will save a lot of money compared to making it at MDL.

Let India focus on building nuclear submarines and not pay higher sums to pay for MDL inefficiencies plus foreign vendor greediness.

 

[Radha Ramanan]

I wish we would go in for a fleet of nukes, better than this tamasha. But that is going to take a long time. A nuclear SSN will cost $2 billion, I think, if I am right, when 6 are made. Again, stop the purchase of P-8I and go in for a 'desi' maritime platform based on the A320, which has to be maritime qualified. The Israelis and the French have ready-made experience in this. The radar can be an improved version of the UTTAM, which will be better than the one on the P-8 as it is AESA. The MAD boom can be got from Canada. Sonobuoys from Australia or the 'desi' ones that are being made with US collaboration. Developing a CMS combat management system will take time as well. A maritime version of the Spanish C-295 is being proposed already.

But the American system comes with great connectivity of all P-8s in the region for a coordinated attack.

 

[Apocalypse gupta]

Well, we are spending a slightly less price for the three new Kalvari subs without AIP. That is why that deal is in limbo as well. Just bite the bullet, man. Green light both deals. These two are the last warship deals that have a partnership with a foreign country.

 

[abhinav srivastava]

A four-year delay would have escalated the cost, but more than a 50% increase is too much. When the Scorpene deal was signed approximately 20 years ago, it was said that in the late 1980s and early 1990s, Germany transferred the technology for Shishumar submarines, but there had been delays, and our shipyards lost the capability for building submarines. Hence, they went for technology transfer of Scorpene submarines. After the Scorpene submarine technology transfer, they are again going for German submarine technology transfer.

Maybe go for three AIP Scorpene submarines and use the technology transfer to build three to four more Scorpenes. They have put Project 76I in cold storage. Atmanirbharta is just for slogans. 76I should be started at a good pace so that in the next 10 years, we can roll out indigenous submarines. Otherwise, the import and commission cycle will continue.

 

[op gupta]

There are some hidden costs with regards to India's indigenous drive in defence, like too much time and money wastage at the cost of taxpayers' money. Even with full tech transfer, these costly toys serve little purpose. India has not got the luxury to spend stupendously by challenging the very existence of labour unions and completely ignoring the rights of labourers to keep big businesses happy and completely wipe off their bad debts.

 

[abhinav srivastava]

Quick back-of-the-envelope calculation tells that 1 Euro = Rs 68 in 2015 and 1 Euro = Rs 101 today. That means the price quoted in Euro will have increased by 1.5 times because of the exchange rate alone. So, 43,000 Cr (estimate in 2015) will have become Rs 65,000 Cr. Therefore, if Germans are asking for Rs 70,000 Cr, that does not appear out of whack.

They are asking for $1.3 billion per boat instead of $800 million. So $800 million * 76 will be approx INR 6,080 crore per sub. At today's price, $1.3 billion @ 86 will be 11,180 crore per sub.

 

[Anant]

They are asking for $1.3 billion per boat instead of $800 million. So $800 million * 76 will be approx INR 6,080 crore per sub. At today's price, $1.3 billion @ 86 will be 11,180 crore per sub.

The Germans deal in euros, not USD, even if we pay them in USD. Oh, and did you factor in US inflation when calculating those numbers, sir?

 

[Maxo]

USA - VIRGINIA CLASS NUCLEAR SUBMARINE COST 3 BILLION $ EACH . MADE IN INDIA NUCLEAR SUBS. COST UNDER 2 BILLION EACH ...... INDIA NEEDS TO REVISE ITS POLICY . INDEPENDENT GEO STRATEGIC PATH IN WORDS NOT ENOUGH WHEN THE INDIA WALKS THE OLD DEAD BEAT PATHWAYS OF IMITATION & A FOLLOWER .... CEASE FUELING OTHERS CHIMNEYS WITH BLOOD & SWEAT MONEY OF INDIANS .... DURING COVID MILIONS OF SAVINGS WIPED OUT .... THEN THIS BE OBSCENELY SINFUL ... SEVAK MUST REDEFINE "SERVICE" TO " INLUDE" INDIANS .