India’s Shipbuilding Ambitions

India has a coastline longer than the Great Wall of China. Then why are we paying $75 billion a year to foreign nations just to ship our goods? That’s the billion-dollar question.

Despite being a maritime nation with over 7,500 km of coastline, 95% of our international trade by volume (and 70% by value) still relies on foreign shipping. Why? Because we hardly build or own any ships ourselves.

Yes, you read that right.

Let’s try to understand why the opportunity is enormous, why India missed the wave, and whether this time it’s truly different.

The Global Backdrop: A $200 Billion Ocean of Opportunity

The global shipbuilding market was worth $150.42 billion in 2024 and is forecast to cross $203.76 billion by 2033. That’s $50+ billion in incremental value over the next decade.

Who dominates this pie?

• China: 62.4%

• South Korea: 21.4%

• Japan: 8.8%
  

  

Together, these three nations control 93% of global shipbuilding output.

So, where is India?

Way down the list, 22nd globally, with $1.12 billion in ship exports in 2023. Compare that to China’s $25 billion. The gap is not marginal—it’s massive.

And that’s not all.

Of the 1,526 ships India owns, only 487 are used for international trade. In comparison, China has over 6,000.

China’s shipbuilding dominance didn’t happen overnight. Since the early 2000s, it has gradually scaled up through strong policy support, heavy investments, and a focus on exports. By the 2010s, it rapidly expanded with advanced infrastructure and competitive pricing. Now in the 2020s, China leads globally, proving that consistent strategy and government backing can transform an industry.

Why Does This Hurt Us?

Because shipping isn’t just about moving cargo.

It’s about:

• Controlling your trade

• Securing your supply chains

• Saving precious foreign exchange.

In FY23, India paid $75 billion to foreign shipping lines. That’s nearly equal to our defence budget. Plus, we’re at the mercy of freight rate volatility and geopolitical risks—remember the Red Sea crisis or the Russia-Ukraine war? So, why can’t we just build our own ships?

Building Ships: What’s Stopping Us?

It’s Expensive.

• A small cargo ship costs ₹75–85 crore

• A large container ship? Over ₹8,000 crore

Shipyards need 35-40% of that upfront as working capital.Indian shipbuilders borrow at 9-10% interest, while global competitors get loans at 4–8%.

No Government Cushion

• Other countries give up to 40% subsidies

• Indian shipyards, especially private ones, get zero direct support

  
  

Weak Ecosystem

• Fewer modern shipyards

• Shortage of skilled suppliers and integrated clusters

• Project delays and quality issues
  

Imports Make It Worse

• India depends on foreign countries for key components like navigation systems, marine-grade steel, and diesel generators

• Import duties and higher costs make our ships more expensive
  

How Long Does It Take to Build a Ship?

Ship construction timelines vary based on vessel type and complexity.

So, Is There Any Hope?

Yes. And here’s why India might just pull off a comeback:

• India sits right in the middle of key trade routes in the Indian Ocean. About 80% of the world’s oil and gas shipments pass through these waters

• India has already built aircraft carriers and nuclear submarines, so in terms of technology, we’re not far behind

• India is the second-largest producer of crude steel. If companies refine it into marine-grade steel, it could drastically reduce imports.
  

Is the Government Doing Something About the Shipbuilding Industry?

Yes.

Big Investments & Big Plans

• ₹25,000 crore Maritime Development Fund for long-term, low-cost shipbuilding finance

• Infrastructure status granted to large vessels

• 10-year customs duty exemption for ship components

• Shipbreaking credit notes to boost sustainable ship recycling

• Renewal of Shipbuilding Financial Assistance Policy
  

Public-Private Push

• The government invests 49%, the private sector puts in 51% in new shipbuilding projects

• Adani Group is spending ₹45,000 crore to create a massive shipyard at Mundra Port

• Swan Defence (Pipavav Shipyard) is pumping in $500 million
  

Strategic Global Partnerships

• Cochin Shipyard is exploring JVs with global majors like Hyundai, Hanwha, Samsung (South Korea), and Mitsui (Japan) to enhance domestic capabilities

• GRSE has signed a Memorandum of Intent with Germany’s Carsten Rehder to build four more 7,500 DWT hybrid vessels, adding to its existing order of eight

• GRSE also inked MoUs with UAE-based Aries Marine for offshore platform and vessel construction, and with a leading global engine maker

  
  

New Shipbuilding Clusters

• Four hubs coming up in:

  • Andhra Pradesh (Dugarajapatnam)

  • Odisha (Kendrapara)

  • Gujarat (Kandla)

  • Tamil Nadu (Tuticorin)
    

Ports & Logistics Push

• $20 billion (₹1.66 lakh crore) is being invested in port connectivity and logistics

• Strategic corridors like IMEEC, Eastern Maritime Corridor, and INSTC to boost trade flow
  

U.S. Tariffs Open a Window for India

China builds more ships in a year than the U.S. has in its entire history.To curb this dominance, the U.S. plans to impose a $1–1.5 million fee on China-owned and China-built vessels entering its ports.

This shift could reshape global trade routes, creating an opening for India to emerge as a competitive shipbuilding hub.

But India isn’t relying on tariffs alone—strong government initiatives are already in motion to scale local shipyards, attract private investment, and boost port infrastructure.

India’s Shipbuilding Market Growth

Let’s look at the numbers:

• India’s shipbuilding industry grew from $90 million in 2022 to $1.12 billion in 2024

• Projected to reach $8.1 billion by 2033

• Could unlock a $237 billion opportunity by 2047
  

• 

  That’s a potential 60% CAGR if we keep pushing.

Several Indian shipbuilding giants are already sharpening their focus on the sector:

Garden Reach Shipbuilders & Engineers Ltd (GRSE)

• The company aims to increase its shipbuilding capacity to 28 ships by the end of 2025, in response to the rising volume of defence and non-defence orders.

• GRSE signed a Memorandum of Intent (MoI) with German shipping company Carsten Rehder Schiffsmakler und Reederei GmbH & Co. KG for the construction of four 7,500 DWT multi-purpose vessels.

• The company also signed MoUs with Aries Marine LLC (UAE) for collaboration on offshore platform and vessel construction, and with a prominent global engine manufacturer for technological cooperation.
  

Cochin Shipyard Limited (CSL)

• CSL signed an MoU with Drydocks World (a DP World company) to jointly develop ship repair clusters in India, with a focus on enhancing India's capabilities in ship repair and offshore fabrication.

  
  

Mazagon Dock Shipbuilders Ltd (MDL)

• MDL is collaborating with ThyssenKrupp for the P-75(I) submarines, featuring over 60% indigenization, and aims to position India as a global submarine manufacturing hub.

• It is also exploring tie-ups with Korean shipyards as part of broader capacity expansion plans.

• The Master Ship Repair Agreement with the US Navy remains underutilized due to infrastructure limitations such as draft restrictions at MDL facilities.
  

India’s shipbuilding sector stands at a critical inflection point. The policy push is here, the strategic intent is clear, and private players are stepping up. But execution will determine whether we rise to become a maritime powerhouse—or continue paying billions to foreign fleets while watching global trade pass us by.

This isn’t just about ships. It’s about trade sovereignty, defense readiness, and long-term economic resilience. If India gets this right, the ripple effects could be felt across manufacturing, steel, logistics, and global trade networks.

The ocean of opportunity is vast, and India must now build to sail.

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