India is undertaking significant efforts to expand its shipbuilding capacity with the aim of strengthening the country’s maritime infrastructure and reducing reliance on foreign shipyards. The Modi government is focused on establishing India as a prominent player in the global shipbuilding industry. To achieve this, India is expected to collaborate with South Korea to maximize its shipbuilding capabilities.
Recently, a high-level delegation from Hanwha Ocean Co. Ltd. of South Korea, led by Senior Vice President Jin Su Lee, met with representatives from India’s state-owned Cochin Shipyard Ltd., Hindustan Shipyard Ltd., L&T Shipbuilding Ltd., and Swan Defence and Heavy Industries Ltd.’s Pipavav Shipyard in Gujarat. Officials from India’s Ministry of Ports, Shipping, and Waterways also engaged with the South Korean delegation during these discussions.
India to collaborate with South Korea to expand shipbuilding capacity? How Centre is seeking to unlock India’s maritime development potential | OpIndia
South Korea’s shipbuilding industry is notably dominated by three major players—Samsung Heavy Industries, Hanwha Ocean, and HD Hyundai Heavy Industries. In 2024 alone, HD Korea Shipbuilding secured contracts for 112 vessels worth $12.1 billion, Hanwha Ocean for 26 vessels worth $5.7 billion, and Samsung Heavy Industries for 22 vessels worth $4.9 billion.
India’s collaboration with South Korea is particularly significant, as South Korea is a direct competitor of China in the global shipbuilding market. China has maintained dominance in this sector for over a decade, constructing more than half of the world’s merchant ships by gross tonnage (33 million GT) in 2023, which accounted for 51% of global output. Additionally, China controlled 62% of global shipbuilding orders.
In December 2024, an Indian delegation comprising R. Lakshmanan, Joint Secretary of the Ministry of Ports, Shipping, and Waterways; Shri Madhu Nair, Chairman and Managing Director of Cochin Shipyard; and Binesh Kumar Tyagi, Chairman and Managing Director of the Shipping Corporation of India (SCI), visited South Korea’s leading shipyards, including HD Hyundai Heavy Industries in Ulsan. The delegation received an in-depth briefing on the advanced technologies and production capacities of South Korean shipyards. This visit followed Prime Minister Narendra Modi’s 2016 visit to South Korea.
India’s focus on this partnership stems from its urgent need to acquire 1,000 new commercial vessels, including containerships, liquefied natural gas (LNG) carriers, ultra-large crude carriers (ULCCs), and car carriers.
Modi Government's Plan to Propel India into Top-10 Global Shipbuilding Rank by 2030: Investment, Partnerships, and More
The global shipbuilding market was valued at $207.15 billion in 2023 and is expected to grow at a 6.5% CAGR, reaching $220.52 billion by 2024. In India, the market was worth $90 million in 2022 and is projected to soar to $8.12 billion by 2033, reflecting an impressive 60% CAGR.
To boost India's shipbuilding capabilities and enhance repair clusters, the Modi government has introduced a Maritime Development Fund amounting to Rs 30,000 crore. This initiative complements the Rs 1.5 lakh crore upgrade plan, which includes the development of six deep-draft ports, two transshipment hubs, and the creation of green and smart ports.
Currently ranked 22nd globally in shipbuilding, India aims to break into the top 10 by 2030 and become one of the top five nations by 2047. This goal aligns with the Modi government’s larger ambitions outlined in the Maritime India Vision 2030 and the Amrit Kaal Vision 2047, which focus on capturing a significant share of the global shipbuilding and repair markets.
A noteworthy development is India's long-standing collaboration with South Korea in naval shipbuilding. In 2017, both nations signed a Memorandum of Understanding (MoU) for joint naval shipbuilding, involving state-owned shipyards such as Hindustan Shipyard Limited. The agreement included the joint production of five Fleet Support Ships valued at $1.5 billion, along with two strategic operating vessels costing approximately $448 million.
In 2019, India and South Korea signed a logistics agreement during Defence Minister Rajnath Singh's visit to Seoul. According to an official statement released at the time, “The Ministers exchanged views on regional and international developments of mutual interest. Two MoUs to further defence educational exchanges and extend logistical support to each other’s Navies were signed.”
A recent visit by a delegation from South Korea’s Hanhwa Ocean Co. to India aimed to explore potential partnerships with Indian shipyards and the government. Hemant Khatri, managing director of Hindustan Shipyards Ltd, noted that both nations are focusing on “long-term collaborations in advanced design, technology upgrades, smart solutions, electric propulsion, and joint shipbuilding ventures.”
India’s partnership with South Korea holds the potential to significantly transform the country’s shipbuilding industry, particularly by enhancing skills and modernizing outdated technologies in Indian shipyards. Leveraging South Korea’s technological advancements could help India close the gap through training, technology transfer, and shipyard modernization.
With global shipbuilding slots in countries like China, South Korea, and Japan booked through 2028, India sees an opportunity to establish itself as a reliable alternative for shipbuilding. The government’s strategy goes beyond just constructing new ships to also expanding into ship repair and recycling, building on the country’s existing infrastructure.
Targeting the massive demand from India’s shipping market could present an opportunity worth over USD 237 billion (INR 20 lakh crores) by 2047, provided Indian shipyards meet the demand effectively.
The Indian government has introduced several initiatives such as the Shipbuilding Financial Assistance Policy (SBFAP) and the Right of First Refusal (ROFR) policy to enhance India’s shipbuilding and repair industry. Under SBFAP’s first phase, 313 vessel orders were placed across 39 shipyards, with 135 vessels already delivered.
To further support the industry, proposed subsidies include 25% for specialized vessels and 30% for green or highly specialized ones. The government is also pushing for a ship-breaking credit note in SBFAP 2.0, which would provide shipowners with a credit note worth 40% of the demolition cost, redeemable against new vessel construction at Indian shipyards.
According to MoPSW data, about 44% of India’s merchant marine fleet is over 20 years old, highlighting the need for modernization. Plans are underway to establish an apex body to speed up the implementation of SBFAP 2.0.
Reports from November revealed that both South Korea and Japan are interested in investing in Indian shipbuilding yards. India plans to offer joint ventures or stakes in shipyards, attracting foreign investments of $3-5 billion per shipyard. Odisha and Andhra Pradesh have been identified for greenfield shipbuilding yards, while Maharashtra and Gujarat will be considered for brownfield expansions.
With major initiatives like SBFAP and strategic collaborations with South Korea, India aims to adopt sustainable shipbuilding practices in line with global green shipping trends. This will not only boost India’s shipbuilding capacity but also enhance its global competitiveness by producing high-value, technologically advanced, and specialized ships.
India’s goal is not only to become a key global player but also to meet domestic demand for commercial and naval vessels, reducing its reliance on leasing ships from abroad. Currently, India spends around $75 billion annually on leasing, yet controls only 2% of the world’s total tonnage.
India’s ambitious shipbuilding strategy, supported by collaborations with South Korea and Japan, seeks to achieve technological, economic, and strategic advancements, bolstering economic sovereignty and national security by reducing foreign dependence for both commercial and naval vessels.
The success of these initiatives will depend on the effective execution of plans, sustained foreign investment, and the upskilling of the workforce to meet global standards. Increased ship production would create thousands of direct and indirect jobs, given the labor-intensive nature of the industry.
If India can enhance its position in exports and capture even a small share of the market, it could unlock significant export value, providing a major boost to the economy and contributing to its $5 trillion economic goal.
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