India’s shipbuilding industry is at a crossroads, aiming to increase its global market share from less than 1% to become a genuine competitor to major players like China, South Korea, and Japan. This ambition is driven by strategic government policies, a growing domestic demand for ships, and a shifting global landscape.
A New National Strategy
The Indian government has launched several initiatives to revitalize its shipbuilding sector. The Maritime India Vision 2030 and Amrit Kaal Vision 2047 road maps aim for India to be a top 10 shipbuilding nation by 2030 and a top five nation by 2047. Key policies supporting these goals include:
- Financial Support: The Union Budget 2025 introduced a ₹250 billion Maritime Development Fund to provide low-interest, long-term financing for shipbuilding projects.
- Infrastructure Status: Large ships have been reclassified as infrastructure, making them eligible for favorable financing and signaling a major policy shift.
- Domestic Incentives: The “right of first refusal” for public sector shipbuilding tenders has been extended, giving Indian yards a competitive edge in domestic contracts.
- Integrated Clusters: India plans to establish eight maritime clusters—five new and three expanded—to host everything from manufacturing and equipment production to skill development, with an investment of about ₹2 lakh crore over five to six years.
Global Alliances and Niche Markets
To overcome technological and productivity gaps, India is seeking strategic alliances with global leaders. A partnership between HD Korea Shipbuilding & Offshore Engineering and Cochin Shipyard Ltd. aims to leverage Korean expertise with India’s cost-efficient manufacturing. These alliances offer mutually beneficial outcomes, providing international partners with access to a new manufacturing location and an emerging market.
Indian shipyards are also focusing on their established niche in building small to medium-sized and specialized vessels like offshore support, coastal, and general cargo ships. This strategy allows them to differentiate themselves from the high-volume, standardized production of East Asian giants and secure international orders.
Competitive Advantages and Challenges
India holds several advantages, including competitive labor costs and a strategic geographic location on key global shipping routes. The country is also investing in green and high-tech vessels to cater to the global trend toward sustainable technologies. The government’s commitment to naval modernization further strengthens public sector yards and drives technological advancements that can benefit the commercial sector.
However, significant challenges remain. Indian shipyards face high capital costs, dependence on imported components, and lower productivity compared to their competitors. The domestic supply chain for shipbuilding materials and equipment is still developing. Overcoming these obstacles will require sustained policy support, massive investment in modern technology, and a coordinated effort to develop a robust domestic supply chain.
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Source: S&P Global
