India-based Hindustan Shipyard Limited (HSL) and South Korea's Hyundai Heavy Industries (HHI) have signed a memorandum of understanding (MoU) to construct submarines for India.
The agreement includes a 40-year programme that will bolster India's naval forces.
A senior HSL official was quoted by the Times of India as saying: "HHI will help us in the building of submarines, as they are the biggest shipyard in the world and have scientific equipment and methodology.
"India offers a huge potential for the South Korean company. India has a 40-year submarine construction programme and Hyundai doesn't have a stronghold in our sub-continent as of now. It's a win-win situation for both HSL and Hyundai."
HSL has also formed a consortium with Bharat Heavy Electricals Limited and Mishra Dhatu Nigam to bid for the Indian Ministry Of Defence's $9.7bn order for the construction of six submarines, under project 75 (I).
Korea Joogang Daily quoted a HHI spokesperson as saying: "Since HSL wants to be a part of the submarine manufacturing project by the navy, they asked us for help.
"Because they are the largest shipbuilder in their country, the possibility that they will win the order is big."
Indian shipbuilder Garden Reach Shipbuilders and Engineers Ltd recently launched the navy's third landing craft utility vessel, which is part of an eight-vessel programme for the MkIV project.