
Earlier this year, Pakistan and China concluded a deal for Islamabad to purchase eight modified Type 41 Yuan-class diesel-electric attack submarines from China (export designation is the S20, which excludes the air-independent propulsion system). Specifics about the deal have been slow to emerge, but today Dawn, a major Pakistani newspaper, reports that China will build four of the eight submarines it is selling to Pakistan in Karachi, Pakistan’s largest city and most important port city on the Arabian Sea.

Pakistan’s minister for defense production, Rana Tanveer Hussain, announced the arrangement at the inauguration of Pakistan’s Defense Export Promotion Organization (DEPO) Displayer Center in Islamabad. The announcement is significant because it confirms that China will transfer technology for the construction of the S20 submarines to Pakistan. Furthermore, according to Hussain’s comments, construction on the submarines will begin simultaneously in both countries. The Pakistan minister did not indicate a time frame for the start of construction.

Karachi is no stranger to submarines. The Pakistani Navy’s Agosta 90-B submarines have all been through work in Karachi. One submarine, the PNS Hamza, was entirely assembled at Karachi Shipyard and Engineering Works. The French Agosta-class submarines are similar in many ways to the Yuan-class submarines that China will be selling Pakistan. In fact, the choice to construct at Karachi also indicates that the S20s will likely include the air-independent propulsion module add-on since Pakistan has experienced assembled and maintaining AIP on its existing Agosta-class submarines. The Yuan-class submarines operated by China’s People’s Liberation Army-Navy all include AIP.

The choice to assemble the S20s in Karachi also has interest implications for China’s Indian Ocean strategy in general. In late June this year, a Chinese Yuan-class submarine docked at Karachi port, raising eyebrows in India. As Benjamin David Baker recently noted in The Diplomat, by selling S20s to Pakistan, China can ensure that its own PLAN Yuan-class submarines have a facility in the western Indian Ocean that can be used for maintenance, upgrades, and crew rotations. Pakistan, China’s “all-weather” ally, is a logical host to this sort of facility. For Beijing, selling S20s to Pakistan is more than a commercial arrangement with an ally–it’s another way to buttress the PLAN’s ability to operate in far-flung waters in the western Indian Ocean, where China regularly conducts anti-piracy operations. Last year’s U.S. Department of Defense report on China’s military confirms that the PLAN is regularly deploying submarines, including its Shang– and Song-class, to the region.

The China-Pakistan submarine deal is an important accomplishment for both countries. For Beijing, with a sticker price estimated at around $5 billion, the deal represents its largest defense deal abroad. For the Pakistani navy, these eight submarines will result in an important undersea warfare capability that could tilt the balance in its favor in any future conflict with India. China and Pakistan are allies and Beijing, during Chinese President Xi Jinping’s visit to Pakistan earlier this year, announced that it would finance and construct a major economic corridor known as the China-Pakistan Economic Corridor, connecting the country’s Indian Ocean coast with its northern approach to China through disputed territory in Kashmir.