India’s mega shipbuilding plan sets sail with 8 new clusters

The government has finalized the locations with pre-secured land parcels and necessary clearances, Union shipping secretary T.K. Ramachandran said. The mega-initiative, a cornerstone of the nation’s Atmanirbhar Bharat drive, aims to transform India into a global shipbuilding powerhouse.

States have made rapid progress in developing maritime clusters, Ramachandran said in an interview. “All state governments have formed special purpose vehicles to implement the project with approved and identified land parcels and access network connecting the clusters with roads and railway infrastructure. Seaside infrastructure is being developed along with breakwater facilities,” he said.

Nations are increasingly looking at shipping as a strategic sector, given Chinese dominance of the sector. US president Donald Trump has called for revitalizing shipbuilding, viewing it as crucial for both national security and economic prosperity. He has signed an executive order to create a Maritime Action Plan, established a new Office of Maritime and Industrial Capacity within the National Security Council, and proposed measures like imposing fees on Chinese-built vessels entering US.

The five greenfield clusters that will come up in Andhra Pradesh, Odisha, Tamil Nadu, Gujarat, and Maharashtra will host the entire spectrum of ship manufacturing to equipment production, vendors, bunkering stations, insurance and ship leasing, said Ramachandran. These sites will house everything from ship manufacturing and equipment production to vendors, bunkering stations, insurance, and ship leasing entities.

India’s push is driven by a desire to significantly increase India’s miniscule share of global shipbuilding, currently below 1%. The Maritime India Vision 2030 and Vision 2047 plans aim to elevate India into the top 10 and then top five shipbuilding and ship-owning countries worldwide, respectively. The target is to raise the share of Indian-built ships in India’s fleet from the current 5% to 7% by 2030 and a substantial 69% by 2047.

Odisha, Andhra Pradesh and Tamil Nadu have commissioned techno economic feasibility reports, and the government is exploring tie-ups with global shipbuilders for these clusters. While the secretary did not comment on the required investment for these projects, it is estimated that about ₹2 trillion would be required to develop the infrastructure over five to six years. The investment is part of the broader Maritime India Vision 2030, which anticipates a total investment of ₹3-3.5 trillion across ports, shipping, and inland waterways.

In addition, three brownfield facilities will be developed: two in Gujarat (a ship repair facility in Vadinar and a shipbuilding facility in Kandla) and one shipbuilding facility near Cochin Port in Kerala.

Shipping ministry officials have visited shipbuilding hubs in South Korea, Japan, and Scandinavian countries to explore partnerships and joint venture agreements. Ramachandran indicated that some tie-ups between global shipbuilders and Indian private and state-owned companies could materialize soon.

“While we’re seeing progress, the global market is still dominated by China, South Korea, and Japan,” commented Pushpank Kaushik, CEO & head of business development (subcontinent, middle east and South East Asia) at Jassper Shipping. “To bridge that gap, what’s really needed now is a clear push for foreign investment and technology transfer. If policy can make space for that, it’ll not only attract global players but also strengthen our position in the international market.”

Mint had earlier reported about the government’s plan to identify locations on both east and west coast of India as part of its ambitious global ship hub plans.

The Union budget for FY26 outlined several measures to bolster domestic shipbuilding, including a ₹25,000 crore government-industry partnership Maritime Development Fund; revamping the existing Shipbuilding Financial Assistance to address cost disadvantages; and providing credit notes for shipbreaking to help purchase made-in-India ships. The budget also included large ships in the infrastructure harmonized master list, allowing their purchase on easier terms, while providing basic customs duty exemption on raw materials, components, consumables or parts for 10 more years.

India’s shipbuilding initiative would also address a concern of the trade about the uncertainty and variability of shipping costs impacting their competitiveness. With better availability of domestic shipping lines at affordable prices, the freight rate volatility due to shock events like covid-19, the Russia-Ukraine war, Red Sea crisis and the Iran-Israel conflict could also be checked.