India’s ambitious shipbuilding push – Firstpost

India’s shipbuilding programme evokes echoes of a storied past; for instance, HMS Minden, built by the Wadias—a Mumbai-based business house—was the very ship aboard which the US national anthem, The Star-Spangled Banner, was composed in 1814.

Just as that ship carried the ideals that would reshape a nation, today India is trying to harness its maritime prowess—spanning from homemade state‐of‐the‐art warships to the formidable aircraft carrier—to set sail on a transformative journey in commercial shipping.

At present, India spends a staggering $105 billion annually on foreign-built cargo vessels plying trade from the country.

This heavy reliance on imported tonnage is a missed opportunity. The strategic imperative now is to domesticate this capability: to shift from renting ships abroad to building them at home. It’s easier said than done.

Recognising the need for a finance shortcut, India has begun nudging banks towards providing guarantees for shipbuilding. In the last budget this vision was bolstered by the introduction of a Maritime Development Fund (MDF). Designed to underpin India’s maritime sector, the MDF aims to channel financial assistance through both equity and debt securities. With an initial corpus pegged at ₹25,000 crore—of which the government will contribute 49 per cent—the remaining balance is expected to flow from major port authorities and a growing cadre of private investors.

India has reached out to South Korea and Japan, and coastal states are competing to offer land and shipyard infrastructure. In a bid to accelerate India’s engineering and labour advantage, the government is offering generous terms to attract foreign investments.

This dual approach—leveraging both domestic strengths and international expertise—is intended to fast-track the transition towards a robust, self-reliant shipbuilding ecosystem.

Private players too are beginning to take calculated risks in this revitalised sector. The Adani Group’s foray into shipbuilding at Mundra will be the test case. While others, like Larsen & Toubro, are also making significant investments.

Forty-five shipyards have registered under the shipbuilding financial scheme, of which 19 have utilised the benefits for building 144 vessels, for which financial assistance of Rs 385.16 crore has already been provisioned.

Yet private involvement needs to be boosted beyond current programmes if critical mass is to be achieved. A financial incentive linked to production is urgent.

One of the world’s largest shipbuilders, HD Hyundai, is looking at Tamil Nadu as a possible shipyard location.

With the right political will, the shipping minister has Cabinet rank (a first), and a concerted push towards financial innovation and strategic investments, India can chart a new course in shipbuilding. Without more reforms, however, especially easier long-term finance, this shipbuilding dream could well be dead in the water.

The writer is a senior journalist with expertise in defence. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.