India is poised to commit an estimated $10 billion by 2040 towards the acquisition of approximately 112 crude oil tankers, all to be indigenously manufactured.
This ambitious move by the Modi government aims to significantly curtail India’s reliance on foreign-owned vessels for its critical energy imports, thereby bolstering national energy security and fostering a more resilient, self-sufficient economic ecosystem crucial for nurturing zero-net carbon and equitable development paths. As the world’s third-largest importer of crude oil, India’s current dependence on international companies for leasing an ageing fleet of tankers presents a significant geopolitical and logistical vulnerability. The Union Petroleum and Shipping Ministries are spearheading this drive to discontinue this practice, advocating for a robust fleet of “built-in-India” oil tankers. This strategic pivot is designed to ensure an uninterrupted flow of energy trade, insulating the nation from potential global supply chain disruptions and geopolitical volatility.
The initial phase of this monumental procurement plan envisions the acquisition of 79 tankers, with 30 earmarked as medium-range vessels. Sources indicate that the purchase order for the first tranche of 10 crude oil tankers is anticipated by the end of this month. Notably, the tendering process will exclusively consider bids from locally built ships or those developed through collaborations with foreign entities, reinforcing the commitment to nurturing domestic manufacturing capabilities and knowledge transfer. This targeted investment serves as a potent economic multiplier, creating substantial employment opportunities and fostering skill development within the country. This expansion of indigenous shipping capacity runs parallel to India’s broader energy strategy, which includes a significant increase in crude oil refining capacity from 250 million tonnes to 450 million tonnes annually by 2030. This growth is spurred by rising domestic consumption and global demand for refined oil products. By simultaneously enhancing refining capabilities and securing its own transport fleet, India aims to strengthen its energy supply chain comprehensively, paving the way for greater strategic autonomy in energy logistics. The long-term vision is to elevate the share of domestically built crude tankers from a mere 5 per cent currently to 7 per cent by 2030, and a substantial 69 per cent by the target year of 2047, when India aspires to achieve ‘developed nation’ status.
The strategic push into shipbuilding is further buoyed by comprehensive policy support. The Modi government has accorded ‘infrastructure’ status to large ships, as announced by Finance Minister Nirmala Sitharaman in the budget for 2025-26. This classification includes large vessels in the harmonised master list (HML) for infrastructure, thereby making them eligible for crucial financial incentives. This measure is expected to attract significant private investment into the shipbuilding industry, catalyzing fleet modernisation and technological advancement. To provide long-term financing support, a Maritime Development Fund (MDF) with a corpus of ₹25,000 crore has been allocated. This fund will be instrumental in facilitating ship acquisition and other maritime industry needs, with up to 49 per cent of the corpus contributed by the Central government, and the remainder mobilised from various public and private stakeholders. While the global shipbuilding market, valued at $207.15 billion in 2023 and projected to grow, is predominantly led by China, Japan, and South Korea, India is strategically collaborating with global leaders. Negotiations are reportedly underway between South Korea’s HD Hyundai Heavy Industries Co. and India’s state-owned Cochin Shipyard Ltd. for a new facility in Kochi, signaling a commitment to strategic alliances and technology transfer.
Currently ranked 22nd globally in shipbuilding, India harbours ambitious targets to enter the top 10 by 2030 and secure a place among the top 5 countries by 2047. This vision is deeply embedded within broader governmental frameworks, including the Maritime India Vision 2030 and Amrit Kaal Vision 2047, both aimed at capturing a significant share of the global shipbuilding and ship repair markets. Maharashtra’s recent approval of the Shipbuilding, Ship Repair and Ship Recycling Policy, 2025, further aligns state-level efforts with the national maritime agenda, capitalising on India’s existing prowess in ship recycling, where it ranks second globally with a 32.6 per cent share. This holistic approach to maritime development not only promises thousands of jobs and substantial economic growth but also fortifies India’s strategic autonomy in energy logistics, enabling the nation to navigate the volatilities of the global energy market with greater resilience and self-determination.
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