WASHINGTON — German submarine builder ThyssenKrupp Marine Systems has signed a pact with Indian shipyard Mazagon Dock Shipbuilders Ltd. that would secure local manufacturing in the event the Indian Navy taps the German vendor for new boats, TKMS announced June 7.

The memorandum of understanding, signed in Mumbai where Mazagon is based, happened as German Defence Minister Boris Pistorius made a stop there at the end of his weeklong visit of allied nations in the region.

His presence in official photos from the event suggests Germany’s candidacy for an eventual award of six new submarines, reported by Reuters to be worth $5.2 billion, is far along, according to analysts.

Wednesday’s agreement between the German and Indian businesses is said to cover activities worth €7 billion (U.S. $7.5 billion), according to German newspaper Frankfurter Allgemeine Zeitung.

On the table is the “intended construction of conventional, air-independent propulsion submarines,” TKMS said in a statement.

Executives were keen to stress that the German vendor’s role would lie in providing engineering, design and consultant services, with manufacturing and delivery falling entirely to Mazagon. The approach is meant to comply with India’s policy of mandating that military goods be domestically produced.

The division of labor also befits TKMS, whose German-based shipyards are busy making submarines for the sea services of Germany, Norway, Israel and Singapore, said Johannes Peters, who heads the Center for Maritime Strategy and Security at the Institute for Security Policy of Kiel University.

A prospective multibillion-dollar deal for submarines in India makes the German shipbuilder more attractive for investors, as the ThyssenKrupp conglomerate seeks to sell the business in an effort to consolidate and focus on more predictable operations, Peters said. The shipbuilding business is famously fickle because of its intensive capital needs, financial guarantees and long lead times, he added.

Sebastian Sprenger is associate editor for Europe at Defense News, reporting on the state of the defense market in the region, and on U.S.-Europe cooperation and multi-national investments in defense and global security. Previously he served as managing editor for Defense News. He is based in Cologne, Germany.

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