India plans to spend 850 billion rupees ($10 billion) to purchase 112 crude carriers through 2040, people familiar with the matter said.
At present, state-owned oil companies operate mostly chartered tankers, many of which are aging. The shipping and petroleum ministries are working to enhance domestic control over shipping assets. In the initial phase, the plan includes the procurement of 79 vessels, with 30 expected to be medium-range tankers. The order for the first 10 is expected to be issued within the month, the sources said.
Only ships constructed in India, even if foreign partners are involved, will qualify for purchase. This requirement is intended to support the domestic shipbuilding industry and reduce reliance on imports.
India's refining capacity is projected to increase from about 250 million tons annually to 450 million tons by 2030. The anticipated growth is driven by both domestic and international demand for petroleum products. With the nation depending heavily on crude imports, enhancing shipping capacity is considered a strategic step to secure supply lines.
Currently, 5% of India’s oil tanker fleet is locally built. The government aims to raise this to 7% by 2030 and to 69% by 2047, aligning with its long-term development goals. To support this strategy, the Indian government earlier announced a 250 billion-rupee fund aimed at strengthening the maritime sector and promoting local shipbuilding.
The plan also includes expanding shipping capacity for commodities such as coal, fertilizer, and steel. These new vessels will also be constructed domestically, with a long-term goal of replacing foreign-built ships.
India’s shipbuilding sector remains in its early stages and faces challenges due to limited domestic demand. However, officials believe that with increased orders and foreign participation, economies of scale can be achieved. The government is inviting international shipbuilders, including firms from Japan and South Korea, to establish production facilities in India with potential incentives.
South Korea’s HD Hyundai Heavy Industries Co. is reportedly in talks with India’s Cochin Shipyard Ltd. to open a new shipbuilding facility in Kochi. Discussions have also taken place with other leading companies such as Samsung Heavy Industries Co. and Japan’s NYK Line.
Rajiv Jalota, former chairman of Mumbai Port Trust, commented: “It is a good move from energy security point of view since the dependence on China for a lot of these services is high. The world needs to develop alternatives.”
The shipping and petroleum ministries, along with the Press Information Bureau, have not yet responded to requests for comment.
