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If you’ve ever stood near an Indian port and watched those massive oil tankers glide in, you might’ve wondered, how many of these are actually ours? The answer, more often than not, is… not many.
Most aren’t built here. Many aren’t even owned here.
They’re foreign ships we rent to bring in the crude oil that powers our economy. And now, the government wants to flip that story. Not with a token order or a symbolic launch, but with a ₹85,000 crore ($10 billion) plan to build over a hundred oil tankers right here in India by 2040.
Sounds big? It is.
Over the next 15 years, India plans to buy 112 crude carriers in phases. The first phase alone includes 79 ships — 30 of them medium-range vessels — and the very first 10 tankers could be ordered as early as this month.
There’s one clear condition: they have to be built in India. Sure, we can borrow technology or designs from countries like Japan or South Korea, but the hulls and decks must take shape in our own shipyards. Why? Because this steady stream of work is exactly what our domestic shipbuilding industry needs to grow up fast and compete globally.
And there’s more. The Shipping Corporation of India (SCI), the country’s largest shipping line, is on its own expansion spree. It’s ordering 26 India-built ships worth ₹19,820 crore, adding 1.18 million gross tonnes to its fleet.
Put that together with orders from petroleum, steel, and fertiliser sectors, and you’re looking at 207 ships worth nearly ₹1.5 trillion. All of this feeds into one long-term goal: raise the share of locally built tankers from 5% today to 7% by 2030, and then make a giant leap to 70% by 2047.
Of course, building these many ships isn’t just about ambition, it’s also about money. The government has set up a ₹25,000 crore Maritime Development Fund to finance shipyards, offer tax breaks, and create shipbuilding clusters along the coast.
There’s also the Shipbuilding Financial Assistance Policy 2.0, with ₹18,090 crore to push greener and more tech-heavy vessels. But here’s the twist: the Finance Ministry is reportedly thinking about trimming subsidy rates by about five percentage points from what was originally planned. Not confirmed yet, but something the industry is watching like a hawk.
Meanwhile, partnerships are starting to click into place. In July, HD Hyundai signed a deal with Cochin Shipyard to collaborate on design, technology transfer, training, and joint bidding.
States like Tamil Nadu, Gujarat, and Andhra Pradesh are pitching to host mega shipbuilding clusters, with Thoothukudi looking like a frontrunner for a ₹10,000 crore facility. The idea is to pull in global players to build ships in India for both our needs and international buyers, pretty much the playbook China ran two decades ago to become the shipbuilding giant it is today.
And speaking of giants, here’s the competition: China controls 65% of the global orderbook and will deliver 53% of the world’s ships in 2024. South Korea comes next at 28%, Japan at 12%. India? Somewhere just above 16th place.
The global orderbook is dominated by container ships (27% of the fleet) and LNG carriers (50%), while tankers and bulk carriers, the very segments India is targeting — make up only 14% and 11%. That’s actually good news for us: less chance of a glut. But if oil demand slows or trade patterns change, we’d still feel the squeeze.
The roadblocks aren’t small. Most government shipyards are tied up with defence contracts, and private ones often lack the high-end tech like robotic welding or advanced digital ship design tools.
We still rely on imports for marine-grade steel for commercial ships, propulsion systems, and navigation electronics. And because shipyards often work in isolation without shared infrastructure, they miss out on cost efficiencies. The planned maritime clusters with shared testing labs, design centres, and production facilities could solve some of that, but they’re still in the planning stage.
And here’s a big unknown: which shipyards will actually get the orders for the SCI expansion and the 112 crude carriers? The government hasn’t published a yard-by-yard allocation yet. The Hyundai–Cochin Shipyard deal is the clearest hint so far, but the first 10 tanker contracts will set the real tone, for quality, for timelines, and for whether this ambitious plan can actually stay on track.
If it all works, India could go from a minor player to a serious name in global shipbuilding, making not just more ships, but bigger, better, and greener ones.
If it falters, we’ll still be here at the docks, watching China, Korea, and Japan dominate the seas while we keep paying rent for their vessels. The tide’s starting to turn, the question is, can we ride it all the way?
FAQs
What is India’s plan for building oil tankers?
India plans to build 112 crude oil carriers domestically by 2040 under an ₹85,000 crore ($10 billion) initiative. The goal is to reduce dependence on foreign-built and foreign-owned vessels by producing them in Indian shipyards.
How many ships will be built in the first phase?
The first phase includes 79 ships, of which 30 will be medium-range vessels. The first 10 tankers could be ordered as early as this month.
Why must these oil tankers be built in India?
The government wants to strengthen India’s domestic shipbuilding industry, create jobs, and build global competitiveness. While technology can be sourced from countries like Japan or South Korea, the construction must happen in Indian shipyards.
What role is the Shipping Corporation of India (SCI) playing in this plan?
SCI is ordering 26 India-built ships worth ₹19,820 crore, adding 1.18 million gross tonnes to its fleet. This is part of the broader effort to expand the country’s shipping capacity.
What is the target for locally built tanker share in India’s fleet?
India aims to increase the share of locally built tankers from 5% today to 7% by 2030, and then make a big jump to 70% by 2047.
How is the government funding this shipbuilding expansion?
The government has set up a ₹25,000 crore Maritime Development Fund and launched the Shipbuilding Financial Assistance Policy 2.0 with ₹18,090 crore to promote greener, high-tech vessels.
Which states are competing to host shipbuilding clusters?
Tamil Nadu, Gujarat, and Andhra Pradesh are in the race, with Thoothukudi emerging as a frontrunner for a ₹10,000 crore mega shipbuilding facility.
Who are India’s main competitors in global shipbuilding?
China leads with 65% of the global orderbook, followed by South Korea at 28% and Japan at 12%. India currently ranks just above 16th place.
What are the major challenges for India’s shipbuilding industry?
Challenges include limited shipyard capacity due to defence orders, lack of advanced shipbuilding technology, reliance on imports for marine-grade steel and critical components, and absence of shared infrastructure.
What could be the outcome if this plan succeeds or fails?
If successful, India could emerge as a major global shipbuilder of large, greener oil tankers. If it fails, the country may remain dependent on renting foreign vessels, with competitors continuing to dominate the global market.
