(Bloomberg) -- Thyssenkrupp AG's marine arm and India's Mazagon Dock Shipbuilders Ltd. intend to jointly build submarines for the Indian navy, signaling the country is increasingly expanding its sources of military hardware beyond top supplier Russia.
Thyssenkrupp Marine Systems would helm engineering and design of the vessels if India chooses to hand a contract to the manufacturers, while its Indian counterpart will be responsible for local construction and delivery, according to an initial pact the companies signed Wednesday.
The move is a change from two years ago, when the European defense contractor had shown no interest in jointly manufacturing subs in India when the tender was announced. India is looking to order six diesel-electric submarines at an estimated cost of $5.2 billion.
Thyssenkrupp Marine Systems has been seen as a preferred manufacturer for the project. The Kiel-based company is one of two submarine makers globally offering air-independent propulsion — a technology that helps non-nuclear submarines stay underwater longer.
Germany wants European defense companies to step up efforts to supply New Delhi with modern military gear as a way to help Prime Minister Narendra Modi's government wean off its arms dependence on Russia and act as a bulwark against China's growing diplomatic and military assertiveness.
Thyssenkrupp-made submarines were used in the past by the Indian navy, making them a far more compelling choice compared to South Korea's Daewoo Shipbuilding & Marine Engineering Co. and Spain's state-owned Navantia Group.
German Defense Minister Boris Pistorius called the signing a “milestone” for the planned submarine project.
“Now it remains to be seen how the process will continue in the coming months,” Pistorius told reporters in Mumbai. He added that Germany and India plan to deepen their military cooperation.
--With assistance from Arne Delfs.
(Updates with German minister's comments in seventh paragraph.)
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