The Indian Navy will cut INS Khanderi, a six-year-old Scorpene-class submarine, in half at the Hazira shipyard in Gujarat to install an indigenous air-independent propulsion (AIP) system developed by DRDO. The upgrade, set to begin later this year and last two years, will extend the submarine's submerged endurance to two weeks and increase its length by approximately 20 meters. Pakistan currently operates three Agosta-class submarines with AIP, a capability India lacks.

The AIP module will be integrated mid-hull with coordination between DRDO, Mazagon Dock Shipbuilders, and French designers Naval Group. Once completed, the upgrade will be extended to the remaining five Scorpene-class submarines; all six future German-designed submarines for India will also feature AIP as part of their original design. The Defence Acquisition Council (DAC) is expected to consider the proposal for the remaining Scorpene retrofits at its next meeting.

The Indian Navy is simultaneously preparing for the mid-life refit of Russian-built Kilo-class submarine INS Sindhuvijay at Hindustan Shipyard, which will extend its service by two decades. Another refit, for the indigenously built frigate INS Betwa, may also be cleared by the DAC soon. Meanwhile, India's plan to build three additional Scorpene submarines is on hold after New Delhi shifted focus to a €9 billion German submarine project, despite French President Emmanuel Macron raising the matter during a recent visit.