India aims to become a shipbuilding powerhouse, with the Cabinet of Prime Minister Narenda Modi signing off on a package worth almost 850 billion rupees ($9.6 billion) Wednesday to help local shipyards compete with global shipbuilding giants in China, Japan and South Korea over the coming years.
The ambitious industrial push is part of a multipronged approach aimed at strengthening the South Asian nation’s shipbuilding capacity, improving long-term financing and promoting domestic shipyard development as India seeks to boost resilience and strategic self-reliance as China speeds ahead to become a global maritime power.
“We want to be able to build our own ships, flag them here ... We think this plan will not only be commercially sensible but also strategically,” T.K. Ramachandran, India’s port, shipping and waterways secretary, told reporters.
India currently owns less than 1% of the world’s commercial ships and only 5% of the country's exports and imports are carried on Indian-flagged ships. The world’s most populous nation also faces a 15% to 20% cost disadvantage in ship production compared to Japan, Vietnam and other markets.
To tackle these issues, New Delhi announced that it will launch a $3 billion maritime development fund to provide long-term financing for the sector, including for the purchase of new ships and facilities.
An additional $2.4 million is set to flow into a program aimed at expanding annual shipbuilding capacity to 4.5 million gross tons. These funds are also meant to set up a ship technology center and support the establishment of large shipbuilding clusters.
“We will have anchor shipyards across the country making the ships while ancillary units will produce or manufacture all the equipment and parts that go on them,” Ramachandran said.
Funds will also be made available to support boosting capacity at India’s 61 existing shipyards, with up to 25% of the capital costs of setting up new infrastructure to be provided as a grant.
New Delhi also wants to reduce the cost of debt for the sector and improve project bankability. The latter includes a government decision to declare shipbuilding an infrastructure project, a step that will help the sector get more favorable borrowing conditions.
“We are trying to bridge gaps and provide assistance to some of our shipyards so that they can also be competitive,” the official said, adding that the plan also includes increasing the volume of cargo that the country’s more than 200 ports can handle.
“By 2047, the 100th anniversary of India’s independence, we want to be able to reach about 10 billion tons of throughput in our ports, compared to 2.6 billion tons at the moment,” the port secretary said, stressing that this will require increases in both port capacity and efficiency as well as improvements to the country’s existing waterways.
Ramachandran explained that the ambitious program, which also encompasses the establishment of a national shipbuilding mission to oversee all initiatives, will require greater cooperation with foreign partner shipyards, including those in Japan and South Korea.
“We have a lot of people, the only problem is that we need to get the technology and training modules from other countries,” the official said. “Since we have the manpower, maybe we can join with them, and we can build their ships here when they face capacity constraints.”
India’s Ministry of Ports, Shipping and Waterways aims to increase the country's share of global seafarer employment from approximately 12% to 20%.
Today, the maritime sector remains a backbone of India’s economy, supporting nearly 95% of the nation’s trade by volume and 70% by value, according to government data. Beyond its economic impact, the new initiatives aim to strengthen national, energy and food security by bringing resilience to critical supply chains and maritime routes.
The push comes as Washington is also seeking support from shipbuilding powerhouses Japan and South Korea to revitalize its languishing shipbuilding industry and counteract China’s maritime and naval industrial dominance.
In just a few decades, China went from 4.7% of global commercial ship completions by gross tonnage in 2000 to 51.9% of open-order gross tonnage in 2023. That same year, China beat Greece to become the world’s largest shipowning nation by tonnage.
Last year, Chinese shipyards booked 74% of all new-build orders by tonnage, according to the Marine Insight magazine, making it the undisputed leader of the global shipbuilding industry. The United States is currently in sixth place.
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