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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[Hawkeye]

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.

It has been almost 5 years since selecting German TKMS, why didn’t they start the project? What were they doing all these years?

 

[Sunny]

If the U-214 submarines truly are very expensive, we should just go for 6-12 additional Scorpene and focus on P-76. That way we would save money and have a fleet centered around Scorpene easing training and spare parts requirements, besides weapons.

 

[DS]

Ridiculous price increase for Project 75i.
Scrap the project. Build SSN submarines in lieu and refurbish our old Kilo class boats in India. Arihant class first design was an SSN , no hump , streamlined and unlimited endurance of 10 years plus with a nuclear power plant.

Time to build at home now.

 

[Sandeep]

India has no option to pay because the technology and capability requirements are very advanced and tailored to suite our needs. Also these will be the last foreign submarine that we buy because we already have our own indigenous nuclear and diesel submarine development program. We should also focus more on completing our own development and manufacturing capability to reduce construction delays.

 

[Mango_Indian]

Not quite... Firstly, the exact costs of the ATV project that led to the Arihant-class have never been disclosed publicly. There are reports that each ship cost Rs. 4,000 crore plus the cost of the reactor and the SLBMs, and on the other hand, there are also reports that the whole development process for nuclear submarines cost as much as Rs. 90,000 crore in total. What we can say is that each boat almost certainly costs upwards of a billion dollars each, including the reactor costs.

Now, coming to your next point about integrating AIP into the Project 636.3 boats. You can't just take an existing SSK design, cut it open, and add in an extra hull plug. Any such modification would require a significant redesign, not to mention that the internal arrangement of the hull would be to be redone, plus the changes in hull profile would mandate an entire set of tests and the like. It would be closer to building a new submarine design based on the Kilo-class rather than a Kilo-class variant.,

Next, who on Earth told you the 636.3s can fire ballistic missiles from their tubes? They can fire cruise missiles, yes, but ballistic missiles, by dint of their name and trajectory, require vertical or near vertical launch. Moreover, there isn't any practicable ballistic missile in the world that can fit into a 21 inch torpedo tube. Oh, and even our Project 877EKM Kilos can fire cruise missiles from their torpedo tubes after their upgrade to the Project 877.3 standard.

Finally, you do realise that SSBNs and SSNs / SSKs are vastly different right? Keeping weaponry costs out, SSNs tend to cost more than SSBNs per ton of displacement, and that is simply because they have to be faster and more compact. Moreover, the operational costs of SSNs are considerably higher than the costs of SSKs. India needs both SSNs and SSKs.

We do not have the kind of money needed for an all-SSN fleet. In case you missed it, we don't exactly nearly as much as the US does, and they are the only nation that can afford a sizeable all-nuclear submarine fleet. The UK and France also have a SSN-only fleet, but their fleets are fairly restricted in size.

I don’t think you are disagreeing on any of the points I made.

While exact costs and even service status are classified for the IN nuclear submarines, as per many online sources the entire program cost averages ~$1-1.1 billion per boat. Operational costs of nuclear submarines are higher than diesel submarines, but neither do they have a 1:1 mapping. A nuclear submarine can easily project power that of 2 diesel submarines if not higher.

The 636.3 class can fire 1500+ km range Kalibr missiles. These are cruise missiles and not ballistic missiles, but for Indian mission requirements, they would be sufficient.

Regarding AIP integration, I never suggested cut-and-fix. It will require a ~2/3-year lead time, but that can be worked out for new build submarines built as per Indian specifications. And the reason I mentioned that they should be manufactured at a Russian yard is their 2-3 year turnaround for a submarine manufacture. Which will mean that the AIP + submarine integration and manufacture will be wrapped up in less than 72 month timeline projected by MDL. I would think IN would want to integrate quite a few sub-systems as is typical of Russian platforms.