India wants to rank in the top ten shipbuilding nations by 2030, according to the Indian secretary for the Ministry of Ports, Shipping & Waterways. Compared to the current contribution of less than 1% to global shipbuilding, this will represent a major rise. “We must grow at a CAGR of at least 17–18% if we wish to transport 20% of our freight. In the next five years, this is ten or twenty times (our current output levels),” stated T K Ramachandran, the shipping ministry secretary.
The comments are made in the midst of the ongoing Middle East turmoil, which has raised prices and raised the possibility of supply disruptions for India. Forty percent of India’s oil imports pass through the Gulf. Ramachandran clarified that the government is attempting to increase shipbuilding and ship ownership in the nation through financing initiatives and legislative initiatives in order to address the problem of India’s significant reliance on foreign-flagged vessels for cargo transit. A ship or vessel registered under the maritime regulations of a different nation is referred to as a foreign-flagged vessel. China currently dominates the shipbuilding sector, producing more than 60% of all ships worldwide, with South Korea and Japan coming in second and third.
Together, these three Asian countries build 85% of the world’s fleet. Ramachandran stated that although India produces less than 1% of the world’s shipbuilding, the country’s status is now improving progressively. In order to encourage domestic shipbuilding, the government implemented the New Shipbuilding Financial Assistance (SFA) policy in 2017, which gives Indian shipyards 20% of the contract price, fair price, or actual payments received for each vessel they build over a minimum of ten years. According to the ministry’s annual report, policy guidelines have also been implemented to encourage the usage of Indian-flagged vessels for government or PSU purposes.
The government also provisioned ₹25,000 crore in the budget in January, 2025 under the Maritime Development Fund. These funds in the short term will provide equity support to Indian players for increasing ownership of ships in India, aka Indian flagged ships. In the long term, the fund will be used for boosting shipbuilding in the country, according to Ramachandran. Moreover, the government is preparing to expand existing shipbuilding capacity and commence 2-3 new greenfield shipyard facilities to achieve its goals for the maritime sector, according to Ramachandran. Besides, Sagarmala Development Company, an entity under the ministry’s control, has also applied for Non-Banking Financial Company license to disburse funds for shipbuilding, ship repair and other projects.
SDC is likely to act as a catalyst to finance maritime development projects as it will tie up with PSU-lending agencies to fund large projects, an Elara Capital report said. The key beneficiaries are likely to include Shipping Corporation of India, Adani Ports & SEZ, JSW Infrastructure, Cochin Shipyard, ITD Cementation, and Afcons Infrastructure, according to the brokerage firm. Indian shipbuilding sector is largely dominated by public sector companies like Cochin Shipyard, Mazagon Dock Shipbuilders, and others. There are 53 Shipyards in the country, 7 under the central public sector, 2 under state governments and 44 under private sector. Of these companies, there are only a handful of players whose shares are traded on the securities market.
