By Shivanand Pandit
The India Maritime Week, held from October 27 to 31, 2025, in Mumbai, presided over by Prime Minister Narendra Modi, marked a significant policy shift — it reflected the government’s growing recognition that shipping is not merely a commercial enterprise but also a strategic national asset. For nearly two decades, however, India’s shipping sector had witnessed a steady decline. The ideological emphasis on liberalisation, privatisation, and globalisation that began in the 1990s gradually eroded state support for the domestic shipping industry. This policy orientation diluted India’s strategic intent and reduced government involvement in the sector.
Except for investments in port infrastructure and seafarer training, the government showed limited interest in developing an integrated national shipping capacity. Its focus remained largely on educating and training Indian seafarers so they could find employment on foreign-flagged ships, thereby earning foreign exchange. Meanwhile, the once-dominant Shipping Corporation of India (SCI) — which had enjoyed global stature in ship ownership — suffered neglect. The withdrawal of policies that gave SCI preferential rights, such as the first right of refusal to transport India’s oil imports, under the pretext of ensuring a “level playing field,” severely weakened the corporation. Eventually, SCI was almost pushed towards privatisation, a move that could have undermined India’s maritime sovereignty.
The COVID-19 pandemic was a turning point. It exposed India’s overdependence on foreign-owned vessels, leaving the country with limited control over its own trade logistics. With private Indian shipping companies too small to fill the gap, India’s vulnerability in times of global disruption became evident. This experience led to a major policy rethinking: the government began to acknowledge that shipping is both an economic lifeline and a strategic necessity, especially in a world facing supply chain disruptions, rising protectionism, and renewed economic nationalism among Western powers.
In response, the government has taken steps to revitalise the Shipping Corporation of India and expand its fleet strength. The investments announced during India Maritime Week — amounting to lakhs of crores of rupees — were heavily focused on port-related infrastructure. India’s ports are increasingly being managed under a landlord model, in which port authorities lease terminals to private and foreign operators while earning revenue shares. This arrangement has strengthened the financial position of ports, enabling them to undertake ambitious projects such as the transhipment hub at the Andaman Islands led by the Chennai and Kolkata ports.
Further investments are being directed towards port connectivity, the Sagarmala programme, and the training of Indian seafarers. Another key initiative involves encouraging foreign shipping firms to register their vessels in India through locally incorporated subsidiaries. This would give the Indian government greater regulatory influence over its operations and enhance related industries such as marine insurance and logistics services.
However, one crucial area still shows limited progress — domestic shipbuilding. The growth of India’s merchant shipbuilding capacity has been minimal. The ability to design and manufacture state-of-the-art LNG carriers, green fuel-powered vessels, and other advanced ships would have demonstrated India’s industrial, technical, and project management capabilities in heavy industry. The real test of India’s maritime self-reliance will come when Indian shipyards are capable of rapidly producing modern, environmentally sustainable ships that can compete globally. Only then will Indian shipping truly move ‘full steam ahead.’
Shipping industry woes in India
Years of inadequate policy focus and the removal of preferential treatment have considerably weakened the SCI, the country’s flagship state-owned entity in the maritime sector. Once a strategic asset, SCI is now on the verge of privatisation, and its shrinking fleet has significantly eroded India’s maritime strategic autonomy. As a result, India is compelled to depend extensively on foreign-owned vessels for global trade, creating serious vulnerabilities during international crises, geopolitical conflicts, or sanctions. This heavy reliance undermines the country’s ability to maintain secure and uninterrupted supply chains when global maritime routes face disruptions.
India’s shipbuilding ecosystem is also lagging. Domestic shipyards do not possess the technological expertise, financial capability, or large-scale infrastructure needed to manufacture modern and complex ships—such as LNG carriers, ultra-large containerships, or vessels powered by environmentally friendly fuels. When compared to global leaders like South Korea, Japan, and China, India falls behind in both engineering innovation and industrial efficiency. The domestic private shipping sector remains underdeveloped, with few companies owning or operating sizable fleets. Most private shipowners struggle to access affordable and long-term finance or benefit from substantial government support to expand their operations. The high cost of capital, coupled with regulatory challenges, acts as a deterrent for potential new entrants in the sector.
The shift toward liberalisation in the past decades also diluted India’s strategic focus on building an indigenous maritime capacity. Policies increasingly favoured foreign competition rather than promoting domestic fleet expansion or self-sufficiency. Moreover, the absence of a clear, unified long-term maritime vision has led to fragmented growth across various segments of the industry. While port infrastructure has advanced under the landlord port model, these improvements have not adequately benefited the shipping or shipbuilding sectors, limiting the development of a cohesive maritime ecosystem.
Furthermore, the Indian shipping industry is yet to embrace global shifts towards sustainable and digital maritime practices. The country lacks a strong presence in areas like green maritime technology, decarbonised shipping, and advanced digital navigation systems. Additionally, India has not developed strong financial institutions or maritime insurance clusters to provide necessary support to shipping enterprises—a gap that further hampers industry growth and competitiveness.
Time for smart moves
The Government of India should focus on expanding the SCI’s fleet by leveraging direct public investment, acquiring vessels, and assigning priority cargo related to national trade. By doing so, SCI can be strategically positioned to handle energy transportation, essential imports, and other high-priority cargo movements. To create a cohesive development path, the government must align the sectors of shipping, ports, shipbuilding, and logistics under a comprehensive and long-term policy that balances strategic autonomy with commercial viability.
Furthermore, the government should offer targeted financial support such as subsidies, tax incentives, and long-duration loans to foster growth in Indian shipyards. Forming global technology collaborations will enable the construction of modern, high-tech vessels within the country. Incorporating shipbuilding into flagship initiatives like ‘Make in India’ and ‘Atmanirbhar Bharat’ will help boost domestic capabilities and self-reliance. In addition, the creation of specialised financial mechanisms and institutions for ship financing—similar to the export credit agencies in Japan or South Korea—will be essential. Developing domestic marine insurance and reinsurance systems can also minimise India’s reliance on foreign providers.
To attract more ships under the Indian flag, the government should streamline vessel registration processes and provide regulatory or tax benefits. This would not only encourage Indian companies but could also entice foreign firms to register their ships through Indian subsidiaries, thereby increasing India’s regulatory influence. The government must also foster innovation by supporting research and development in emerging areas such as green fuels—including LNG, hydrogen, and methanol—and digital maritime solutions. Indian shipyards should be encouraged to design and build energy-efficient, low-emission vessels that comply with global decarbonisation standards.
Another priority should be the enhancement of maritime education and training institutions so that they produce not only seafarers but a diverse range of professionals, such as naval architects, marine engineers, and ship designers. Strengthening partnerships between educational institutions and the maritime industry will play a key role here. India must also bolster its coastal shipping infrastructure to cut down logistics expenses and reduce the burden on road and rail networks. This includes better integration of port systems using multimodal connectivity under government initiatives like Sagarmala and Bharatmala. At the same time, the government needs to retain control over key shipping assets and routes that are pivotal to national security and energy logistics. Furthermore, establishing bilateral maritime agreements will ensure access to foreign ports in case of emergency or geopolitical disruptions.
