As part of the playbook, the ministry of ports, shipping and waterways (MoPSW) has asked the ministries of steel, chemicals and fertilisers, petroleum, coal, mines, commerce and textile to work on a plan for ship ownership by their respective state-run firms; and also giving preference to Indian-owned and Indian-built ships in all their cargo movements.
According to two people aware of the development, assured business for ships and cargo would be prime movers for attracting investments in shipbuilding facilities in the country where investment is also being explored from mature global shipbuilding giants from Japan and Korea.
“Assured business for ships, would attract shipbuilders to make in India. Government companies would provide the initial push to shipbuilding and policies around Indian ship ownership including incentives for ship breaking would also help in generating the demand outside government fold thereby giving further push to ship manufacturing,” said the first person quoted above.
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When asked about the plan to push domestic ship manufacturing in the country, secretary, MoPSW, T.K. Ramachandran said that demand aggregation has been sought from government ministries. “Demand side aggregation is being requested from petroleum, steel, fertilizer, etc. The first set of aggregators will be from the petroleum sector,” he said.
The government wants to give a major push to ship manufacturing in the country with the intention of making India a global hub for ships of all sizes and build, and to push up ship ownership with considerable scaling of Indian built, owned and flagged ships in cargo operations.
The country’s share in global shipbuilding remains below 1%. The government’s target is to raise the share of Indian-built ships in India’s fleet from 5% at present to 7% by 2030 and 69% by 2047 under the Atmanirbhar Bharat initiative.
“India’s shipbuilding sector may attract more interest, with the government’s Maritime India Vision 2030 and a $3 billion maritime development fund,” said Pushpank Kaushik, chief executive officer and head of business development (Subcontinent, Middle East and SouthEast Asia) at Jassper Shipping, a Hyderabad-based shipping and logistics company. Although these will boost the growth of the sector, high working capital needs (20-25% of the cost of the vessel), high loan interest rates (10-10.5% in India versus 4-8% abroad), and restricted access to sophisticated ship designs are still the main issues. “Though the sector becomes more attractive through government support, competitiveness will over the long run depend on technology spending, strategic partnerships, and low-cost access to finance, which will drive long-term industry participation,” Kaushik added.
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Mint in July last year reported that to create a market for domestic shipbuilding, MoPSW has also proposed a joint venture of the state-run Shipping Corporation of India (SCI) with public sector oil marketing companies to build very large crude carriers (VLCC).
In an exclusive interview to Mint in September last year, shipping minister Sarbananda Sonowal had also said that the government has launched a mega ship building mission that proposes to develop mega ship building parks on the east and west coasts. Also, ministerial teams had visited South Korea and Japan to seek their investment in shipbuilding parks for which at least three state governments have agreed to provide land.
The budget 2025-26 has also unleashed a multi-pronged strategy in a new policy to promote domestic shipbuilding. In has proposed a ₹25,000 crore government industry partnership Maritime Development Fund that would help develop manufacturing clusters with focus on shipbuilding and breaking.
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The budget also proposed that the existing Shipbuilding Financial Assistance (SBF) policy will be revamped to address cost disadvantages while also providing Credit Notes for shipbreaking to help purchase indigenously built ships. The budget has also included large ships in the infrastructure harmonized master list (HML) allowing purchase of ships on easier terms while providing basic customs duty exemption on raw materials, components, consumables or parts for the manufacture of ships extended for another 10 years.
As per maritime Vision 2030 and Vision 2047 plan, the government is targeting to make India among the top 10 and among the top five shipbuilding and ship owning countries, respectively.
The shipbuilding initiative would also address a concern of the trade about the uncertainty and variability (escalation) of shipping cost impacting their market competitiveness. With better availability of domestic shipping lines at affordable prices, the freight rate volatility due to black swan events like covid, the Russia-Ukraine war, the Red Sea crisis, etc., could also be checked.
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