With schemes and sops, India is powering up its ship engines

Mint

5 hours ago

The monster shipyards of China, Korea and Japan have dominated the world's shipmaking for long. Now, India wants to muscle in.
A series of measures to build, repair and finance ships in India are likely this year, two people aware of the plans said, as the country aims to become a global maritime hub. The government is working on nearly a dozen mission-mode measures to fire up the local shipping industry, including a maritime development fund, a revamped shipbuilding assistance scheme, and policies to strengthen domestic ships and ports, the people said on the condition of anonymity.
Apart from shipbuilding, repairs and recycling, the new schemes will also cover financing, insurance, technical management, staffing-crewing and manning, and arbitration.
'The idea is to plug every critical gap in the value chain so that India is not just building ships, but also financing, insuring, managing, and resolving disputes, essentially offering end-to-end maritime solutions," one of the two people cited above said.
Chinese dominance
Japan, South Korea, and China jointly command 90% of global shipbuilding, with China alone accounting for nearly 50% of all new vessel orders. The Chinese dominance has alarmed the US, with president Donald Trump slapping port fees on Chinese-built ships and proposing tax sops for US-made vessels, terming it crucial for security, prosperity, and jobs.
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India is also courting shipbuilders and financiers from Korea and Japan to set up shop in India, the second person added. The goal is to get these companies to support and form Indian joint ventures offering leasing and financing options, with an aim to ensure ships built in India find buyers at home and abroad.
India has also urged some of these companies to offer shipping finance in India, replicating the model in their home country, the people cited above said.
Foreign tie-ups
'Korean and Japanese shipbuilders are in talks with Indian counterparts to form JVs. Cochin Shipyard, for instance, is exploring a partnership with Korean firms for shipbuilding in Kerala," the second person added.
A shipping ministry spokesperson didn't respond to emailed queries.
"With less than 1% share in the global shipbuilding market, India is launching a multi-pronged maritime strategy to break into the world's top 10 by 2030 and top five by 2047," the first person mentioned above said. "Alongside mega shipbuilding parks, the government will roll out missions for ship repair, recycling, financing, insurance, cruise infrastructure, and arbitration—all aimed at building a full-service maritime ecosystem," the first person said.
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To be sure, recent MoUs signed during Union shipping minister Sarbananda Sonowal's Norway visit reflect growing international interest.
Private power
Private shipbuilders are also joining in. Garden Reach Shipbuilders & Engineers has signed deals with Germany's Carsten Rehder to make hybrid 7,500 deadweight tonnage (DWT) vessels, UAE's Aries Marine for offshore platforms, and a global engine manufacturer. Larsen & Toubro has also partnered with Norway's DNV to collaborate on shipbuilding and port infrastructure.
"The recent developments are part of a larger push under India's new shipbuilding mission," the second person said. 'We are not just building ships; we are building the entire ecosystem. Alongside mega shipbuilding parks on both coasts, we are launching parallel missions for financing, insurance, staffing, and more to anchor India's maritime ambitions," the person added.
In September, Mint reported on India's ambitious shipbuilding push, aiming to tap into a global market where traditional giants such as China, Korea and Japan, are overbooked, prompting buyers to seek alternative production hubs for modern vessels.
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"While we are seeing progress, the global market is still dominated by China, South Korea, and Japan. To bridge that gap, what is needed now is a clear push for foreign investment and technology transfer," Pushpank Kaushik, chief executive officer and head of business development (subcontinent, middle east and southeast Asia) at Jassper Shipping.
"If policy can make space for that, it will not only attract global players but also strengthen our position in the international market. This would be a strong complement to the government's vision and help put India on the global shipbuilding map," Kaushik added.
Maritime fund
Existing initiatives to boost shipping include a ₹25,000 crore maritime development fund to raise investment in shipbuilding through blended finance and the development of mega shipbuilding parks on both coasts. The new complementary missions will cover ship repair, recycling, cruise infrastructure, financing, staffing, and insurance.
Ship repair hubs are also being planned in Kochi, Mumbai, Chennai, Kolkata, and Vadinar, besides a centre of excellence and free trade depot for duty-free imports.
India has also launched the Indian International Maritime Dispute Resolution Centre (IIMDRC) to localize arbitration and reduce reliance on global hubs like Singapore and Dubai.
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Meanwhile, a domestic maritime insurance entity, the India Club, is under consideration to offer protection and indemnity (P&I) insurance for coastal and inland shipping.
Mega ports at Vadhavan in Maharashtra and Galathea Bay in Great Nicobar are also central to the plan, aiming to boost port capacity, attract transhipment cargo, and create over 1.2 million jobs.