India has set ambitious shipbuilding targets, aiming to become one of the top 10 global shipbuilding nations by 2030 and top 5 by 2047. The government has outlined a comprehensive strategy, including the establishment of mega shipbuilding parks, financial incentives for green ships, and a Maritime Development Fund in the recent Budget for FY 2025- 26. But India currently holds a market share of just 0.07 per cent in the global shipbuilding industry, ranking outside the top 15. To become a top 10 player by 2030, significant investment will be required. The annual output of Indian shipyards must increase from 0.072 million Gross Tonnes (GT) to 0.33 million GT by 2030, and further to 11.31 million GT annually by 2047 to achieve its top five goal. This ambitious target faces challenges, especially given China’s dominance in the shipbuilding sector.
Antony Prince, President & CEO at G T R Campbell Marine Consultants Ltd said, “The target set by for 2030 is rather difficult to achieve, but by 2047 it is achievable provided we plan and execute all that is required to reach the targeted capacity which is ten times present capacity. This will change positively if Shipyards from Korea and Japan establish their presence in India”. Reacting to the recent Budget announcement for Rs 25,000 crore Maritime Development Fund, Vivek Merchant, Director, Swan Defence and Heavy Industries Limited said, “MDF fund is a game-changer, signalling the government’s serious intent to make India a global hub for shipbuilding. This investment, coupled with the push for port-led development and logistics efficiency, will drive growth for companies like ours. The Rs 1.5 trillion allocation for infrastructure development is another positive step, ensuring better connectivity for shipyards and ports, which is crucial for scaling up operations.”
The government has already started moving towards achieving the goals reaching a collaborative agreement with Soth Korea to enhance its own shipbuilding capabilities through partnerships with major Korean shipyards like Samsung Heavy Industries, Hanwha Ocean, and HD Hyundai Heavy Industries. Deendayal Port Authority (DPA) in Gujarat is looking to lease 2,000 acres in Kutch district to develop a shipbuilding cluster. The target is to annually build 50 very large crude carriers (VLCC) or similar class of seagoing vessels with 3.2 lakh dead weight tonnage (DWT) capacity each.
Challenges for shipbuilding sector in India
However, there are a host of challenges to overcome, such as financial constraints, the need for skilled labour, and technological gaps. According to Antony Prince, “Currently the Indian shipyards’ order book is generally full until 2028.
But one can say that it is overstretched from lack of skilled manpower, design, and material shortage. Though a marginal capacity increase will take place it will not be sufficient to take additional orders. A major area of shortage will be ship design and capacity enhancement will be challenging as it takes about five years to develop superior design capacity”. According to Antony Prince, India may not achieve much increase in capacity in spite of infrastructure build up, unless it plans and implements to train ship designers, shipbuilding managers and skilled workforce.
“The expansion of shipbuilding is directly dependent on availability of ship design capability and capacity. Though to some extent we can buy not so up to date designs from abroad, your ability to compete in the global market depends on the quality of design that you can offer to international clients. However, the current design capacity is grossly lacking. This will put a strangle hold onto our efforts to increase the shipbuilding capacity,” Antony Prince opines. However, he feels that this problem can be vanquished, “If major Japanese Shipyards invest in shipbuilding, we will have increased infrastructure to build more ships. This situation will also change if the former bankrupt shipyards – Bharati, ABG and Pipavav come back to their planned full capacity.” Indian Shipyards currently do not have capacity to build bigger vessels, therefore are confined to small commercial vessels, Naval platforms, and Coastguard vessels.
On the infrastructure end, Antony Prince believes that it is most important for small shipyards to upgrade and expand their docking capacities to accommodate larger and more sophisticated vessels. This, he believes, will appeal to a wider range of international clients. There some are other challenges which hinder Indian shipbuilding capacity progress including shortage of materials like sufficient shipbuilding steel and structural steel, and not having an established main engine and ancillary equipment manufacturing base.
Can India challenge China’s shipbuilding supremacy?
China has been the top shipbuilder in the world for 14 consecutive years. It is a market leader in tankers, containers, and bulkers. In the last decade, China has invested in dual-use shipbuilding capacity, and its order books extend till 2029, and it has no yard space till 2027. The demand for new ships is fuelled by the need to replace aging vessels and by the growing requirement for low carbon ships.
China has captured 62.9 percent of the global shipbuilding orders. The Chinese yards have shifted their focus to more complex ship types, particularly gas carriers. Experts feel that It’s an enormous task for India to challenge Chinese supremacy in this field, and the country will need to increase investment, foreign collaboration, government support, and capacity expansion. Contrary to popular opinion, some experts believe that India’s competitive edge lies in its ability to cater to smaller vessels—a segment largely neglected by shipbuilders in China, Korea, and Japan. These countries typically focus on large, complex ships, leaving a gap for Indian shipyards to capture a reasonable share of the global newbuilding order in this segment.
Steps to enhance Indian shipbuilding capacity
Among the 35-odd functional shipyards in India, Cochin Shipyard leads with 1.1 lakh DWT capacity, followed by Hindustan Shipyard (80,000 DWT), and Shoft Shipyard (10,000 DWT). But experts feel that there is a need to encourage private sector investment and participation in the shipbuilding industry. “The industry still needs policy reforms that encourage private sector participation and reduce dependency on imports for critical components. A clear roadmap for defence shipbuilding and incentives for indigenous manufacturing will further strengthen India’s maritime ambitions.” said, Vivek Merchant.
