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In today's competitive maritime industry, the launch of a new vessel is rarely a groundbreaking event. However, a ship setting sail from Goa is capturing attention for all the right reasons. It may come as a surprise that India has achieved this milestone amid the dominance of global shipbuilding leaders like China, South Korea and Japan. This voyage represents a modest yet significant step towards realizing India’s ambitious vision for its maritime future.
On September 12, 2023, India took a significant step towards reviving its ancient shipbuilding traditions. With financial support from the Indian Ministry of Culture and under the supervision of the Indian Navy, Hodi Innovations, a Goa-based shipyard, has undertaken the manufacturing of a traditional ‘stitched ship.’ Unlike modern LNG supertankers, this 19.6 -meter-long wooden vessel showcases an age-old Indian shipbuilding technique where wooden planks are stitched together using ropes instead of metal fasteners. This project, overseen by Dr. Sanjeev Sanyal, a member of the PM’s Economic Advisory Board, aims to revive traditional craftsmanship and showcase India’s rich maritime heritage on a global stage. While the launch of a wooden ship may not attract global attention in an era dominated by massive vessels like the Seawise Giant (weighing 564,763 tons), for India, it represents much more than just a historical tribute. It embodies a strategic vision—demonstrating the country’s commitment to preserving its heritage while embracing innovation and ambition in the maritime sector. While this may seem daunting, the projections are grounded in reality. This initiative marks a significant step towards revitalizing India’s shipbuilding industry and positioning the country as a key player in global maritime manufacturing. Currently, India holds a modest 0.5% share of the global shipbuilding market. However, the government has set an ambitious target to increase this share to 7% by 2030 and an impressive 69% by 2047. Achieving such a substantial leap—from 0.5% to 69%—requires a well-defined and strategic approach. This is not merely an aspirational goal; the Indian government has introduced key investment plans and policy frameworks to transform this vision into reality.
To drive this ambitious growth, India has firmed up its ambition to become a global maritime powerhouse, with the government allocating around $6 billion to the shipping sector in the 2025-26 fiscal year.
- Maritime Development Fund: A dedicated allocation of $2.88 billion.to enhance maritime infrastructure and support shipbuilding projects.
- National Shipbuilding Fund: An investment of $2.05 billion aimed at stimulating domestic ship manufacturing and fostering innovation.
- Long-Term Planning: A comprehensive 20-year roadmap focused on technological advancements, capacity building, and infrastructure development to position India alongside global leaders such as China, South Korea, and Japan.
These initiatives reflect a strong commitment in establishing India as a global shipbuilding powerhouse. Competing with industry leaders like China, South Korea and Japan will require strategic execution, the adoption of advanced technologies, and substantial investment in skill development. The stitched ship project in Goa represents the first step in this direction—symbolizing India’s broader maritime ambitions. While the goal of achieving a 69% market share is ambitious, the structured strategy and robust financial support make it a realistic and achievable target rather than an unattainable vision.
India’s Maritime Sector: Challenges, Opportunities, and the Path to Self-Reliance
In FY 2020, India incurred $85 billion in sea freight costs, with $75.4 billion paid to foreign shipping companies. This figure is expected to rise sharply to $342.53 billion in 2047 as trade volume grows. This heavy reliance on foreign carriers is attributed to the declining share of overseas cargo transported by Indian-flagged vessels, which dropped from 40.7% in 1988 to 8.5% in 2014, further declining to 7.8% in 2019 and 5.4% in 2022. Between 2008 and 2021, India’s dependence on foreign fleets for export-import cargo resulted in outbound freight charges amounting to a staggering $637 billion, according to government figures. Another estimate suggests that 4.5% of India’s Exim trade expenditure is allocated to freight costs. In 2023, India’s exports stood at $437 billion, while imports reached $672 billion. The country’s maritime sector plays a crucial role in trade, handling approximately 95% of total trade volume and 70% of trade value. Additionally, India ranks third globally in ship recycling. India's presence in the global ship ownership market remains minimal, with a share of just 1.2%. As of December 2023, India owns 1,526 ships with a total capacity of 13.75 million gross tonnage, of which only 487 are deployed for overseas trade. In comparison, Greece holds 17.8% of global ship ownership, followed by China at 12.8% and Japan at 10.8%, followed by other flag states. Furthermore, China holds a dominant position in container manufacturing, reinforcing its stronghold in the maritime sector. Significant developments have been underway in global shipbuilding since 2023. According to figures from Alphaliner, China leads the global shipbuilding industry, with 68.5% of new orders allocated to Chinese shipyards, followed by South Korea at 23.3% and Japan at 6.4%. The remaining 1.8% is distributed among other nations. Currently, India ranks 22nd in the global shipbuilding industry. The market, valued at approximately $150 billion, continues to be dominated by China, South Korea, and Japan, underscoring the competitive landscape that India seeks to enter and expand within. The global ship repair market, valued at $12 billion, presents a significant opportunity for expansion. The estimated distribution of vessels requiring repair and maintenance includes approximately 20,553 general cargo ships, 5,855 container ships, 12,309 oil tankers, 1,382 bulk carriers, and 54,816 other vessels. Gaining expertise in this repair and service sector can serve as a strategic entry point into the broader shipbuilding industry. India currently operates 28 shipyards, with six managed by Central PSUs, two by state governments, and 20 by private entities. However, despite this infrastructure, Indian shipyards account for only 2% of the global ship repair and maintenance market. Even more concerning is India’s minimal 0.5% contribution to the shipbuilding sector. Meanwhile, India’s increasing cargo turnover has heightened the need for a larger domestic fleet. In 2023, India’s merchandise trade reached $1.1 trillion, and historical trends suggest continued growth in the years ahead. Strengthening India's capabilities in shipbuilding and repair will be essential to meet future demand and reduce reliance on foreign fleets.
According to authoritative studies, market dynamics are becoming increasingly favourable for India's shipbuilding ambitions. A key finding from these studies indicate that shipping routes and target markets will shift away from developed nations in the coming years. The McKinsey Global Institute report highlights that by 2050, India and emerging Asia are expected to account for 30% of global consumption at Purchasing Power Parity (PPP)—a significant rise from just 12% in 1997. In contrast, the combined contribution of Advanced Asia, North America, and Western Europe is projected to decline to 30%, down from 60% in 1977. This shift will lead to substantial changes in global shipping routes, with emerging economies driving more than half of global consumption over the next 25 years. Moreover, the scope of this transformation extends beyond Asia. The African market, estimated to have a population of 1.3 billion people, has yet to be fully considered in these studies. Factoring in this emerging consumer demand would further expand the opportunities for India's shipbuilding sector. Given these future prospects, India’s Exim trade sends a clear signal—delays in entering the large-scale shipbuilding sector would mean missing out on a rapidly expanding market. More importantly, the global shipbuilding industry presents immense opportunities, reinforcing the urgency for India to position itself as a key player in this high-growth sector.
The U.S. Shipbuilding Industry and Its Policy Shift
Experts emphasize the need for the United States to strengthen partnerships with Pacific nations like Japan and South Korea while investing in its domestic shipbuilding sector, particularly in its specialized submarine industrial base. The U.S. Defence Development Plan, extending until 2053, includes the production of 290–340 new ships, leading to a 12.5% increase in the U.S. Navy’s budget. The US naval maintenance repair and overhaul (MRO) alone is estimated to be worth approximately $13.7 billion annually. Historically, naval superiority has played a crucial role in military victories. However, the decline of the U.S. shipbuilding sector has made it difficult for the country to meet its naval construction goals independently. The U.S. once produced 5% of the world’s commercial ships in the 1970s, a figure that has now dropped to just 0.2%. The number of shipyards has also declined from 300 in the 1980s to only 20 today, coinciding with China’s meteoric rise in the sector. China now possesses 230 times the shipbuilding capacity of the U.S. The global shipbuilding market, valued at $150 billion, is dominated by China, South Korea, and Japan. According to Alphaliner, China’s shipbuilding capabilities surged significantly between 2015 and 2024, with completed ship manufacturing increasing from 900,000 TEU to 3.61 million TEU. In contrast, South Korea managed just 0.66 million TEU in the same period. Recognizing the strategic implications of China’s dominance, the U.S. government has launched investigations into the sector, initiated during President Joe Biden’s administration and now available as a report in the Trump administration, which highlights China’s increasing dominance in global shipbuilding. The report notes that China’s share of the $150 billion global shipbuilding market grew from 5% in 2000 to over 50% in 2023, largely due to substantial government subsidies. Meanwhile, U.S. shipbuilders have seen their market share shrink to below 1%. The findings could lead to trade measures such as tariffs or port fees on Chinese-built vessels, as proposed by labour unions. Additionally, the U.S. administration is expected to take further action to accelerate naval vessel production for its military and restore shipbuilding-related jobs. President Trump has already announced his intention to increase tariffs on Chinese goods to 60% and has criticized China’s growing influence in both commercial and military shipbuilding. Given the constraints in the U.S. shipbuilding industry, there is also a possibility that the U.S. will seek assistance from allied nations to fulfil its naval construction needs.
India’s Strategic Opportunity in the Changing Global Shipbuilding Landscape
India must act swiftly to capitalize on this shift in U.S. policy, particularly under the Trump administration. India is not a newcomer to shipbuilding. With 60% of the Indian Navy’s budget allocated to capital expenditure, the country has steadily developed shipbuilding expertise. Over the past five years, the Navy has invested $7.51 billion USD in outsourced projects, demonstrating its growing shipbuilding capabilities. Key industry projections indicate a demand for 50,000 ships worldwide over the next 30 years, with a particularly strong emphasis on container ships. The global boxship order book has reached an all-time high of 8.3 million TEU, reinforcing the need for increased production capacity. China remains the dominant player, commanding 68.5% of container ship orders, while South Korea, once the industry leader, now holds 23.3%. The global shipbuilding industry takes 18-30 months on average to produce a tanker, 12-24 months for a container ship, and even longer for LNG vessels. China’s average shipbuilding time is 6-12 months.
A Personal Note on Greek Mythology and its Maritime Dominance
“Among the many books still on my reading list, the Greek epics, the Iliad and the Odyssey, are the ones that I desperately want to get my hands on. My mind keeps whispering that it is not too late to learn about Poseidon, who was bequeathed the dominion of the sea, and his mythical island of Atlantis. The glory and dominance of Greece and Athens extend beyond mythology. Those who became champions in history did not later go into oblivion. The assumed downfall of Greece in modern shipping is because of our limited knowledge. We have yet to explore the economic progress brought by a culture rooted in the Poseidon myth. We do not see Greece in places where countries like America and China share the stage. But Greece is a wonder of the sea. It can be said that Greece rules today's waters. There are no seas in the world without Greek ships. Greece dominates the sea like a monopoly, with 30.25% of global oil tankers, 14.64% of chemical tankers, 15.58% of LNG tankers, 20.04% of bulk carriers, and 9.53% of container ships! The seas are safe with Poseidon as its guardian, as it was a gift from his father Cronus. It is no wonder that 21% of the world's sea trade is carried out by Greek ships. There are approximately 5626 ships owned by Greeks that pass through Indian waters. Greece serves as a benchmark for India’s aspirations in the sector.”
Looking ahead, India must accelerate its shipbuilding efforts to avoid excessive dependency on foreign vessels. If the current trend continues, India will be paying $342.53 billion in ship freight costs alone by 2047. This underscores the importance of a strong domestic shipbuilding industry. To address this challenge, India’s government has introduced the Maritime India Vision 2030, which aims to elevate India’s rank from 22nd to the top 10 in global shipbuilding. By 2047, under the Shipping Ministry’s Amritkal Vision, India aspires to be among the top five shipbuilding nations. As part of this plan, 17 initiatives have been identified for shipbuilding, repair, and recycling facilities. Before venturing into large scale shipyards, India plans to acquire 1000 new commercial vessels including containerships, LNG, ULCCs, Car Carriers etc.
India’s Strategy: Replicating the Automobile Industry’s Success
The transformation of India’s auto industry began in the 1980s with Suzuki Motor Corporation’s entry through Maruti. This experiment proved to be a success and to replicate this model in the shipbuilding industry, multiple government delegations have visited South Korea’s major shipyards—HD Hyundai Heavy Industries, Hanwha Ocean Co. Ltd., and Samsung Heavy Industries—to explore technology transfer and funding opportunities. Reports suggest that negotiations for a strategic partnership are already underway. The Union Shipping Minister's visit to Korea in March is further evidence that India and Korea have almost reached an agreement to cooperate in this field.
According to Thyssenkrupp’s CEO, building ships in India could reduce costs by 50% compared to international levels, primarily due to India’s skilled workforce and lower labour costs. Indian workers can be hired at one-third the cost of European labour, providing a major competitive edge.
Trivandrum Offers the Perfect Solution to India’s Shipbuilding Needs
India currently does not have a modern, large scale shipbuilding facility to meet its needs. The Indian government plans to establish shipbuilding infrastructure near major ports to enhance operational efficiency. Strategic location is a key factor in establishing such a shipyard. The proposed Trivandrum Shipyard in Kerala presents a compelling case for investment due to its proximity to the Port of Trivandrum and also the presence of an engineering and manufacturing ecosystem very close to the proposed site. Trivandrum boasts of institutions like Vikram Sarabhai Space Centre (a space research centre of the Indian Space Research Organisation), Indian Institute of Space Science and Technology (IIST), Southern Air Command (SAC) of the Indian Air Force (IAF), Travancore Titanium Products Limited (TTPL), Kerala State Electronics Development Corporation Limited (Keltron), BrahMos Aerospace, Air India Engineering Services Ltd (AIESL MRO) and others. In addition to this, the immediate vicinity of the port in the Tamil Nadu side already has around 40,000 production and engineering units. Industry experts regard Trivandrum as one of the most suitable locations for next-generation shipbuilding in India.
Trivandrum is set to become India’s first city to explore methanol as a shipping fuel, which has increasing demand, by leveraging an existing waste-to-methanol technology. “As the world moves towards green shipping, Indian shipyards must adopt eco-friendly technologies such as alternative fuels (methanol, ammonia, and hydrogen) to help reach net zero carbon emissions in shipping”, Vivek Merchant, Director, Swan Group. The technology, currently in its infant stages, is capable of producing 15 tonnes of methanol per day from 50 tonnes of waste and can be significantly scaled up. Vivek continues, “Additionally, lightweight aluminium and composite materials could reduce ship weight by 30%, leading to fuel savings.” Trivandrum Port has the potential to build fuel-efficient ships, with a proven solution in the form of Titanium sponge/metal produced by Kerala Metals and Minerals Ltd. Currently supplied to the Indian Defence sector, this advanced material can be utilized in ship building to achieve significant fuel efficiency. Additionally, its application would provide cost reductions in annual maintenance for shipowners. With the necessary technology and infrastructure in place, Trivandrum is well-positioned to integrate these innovations effectively. The next step lies with government decision-makers to capitalize on this opportunity and drive the nation’s shipbuilding advancements.