Recently, a high-level delegation from Hanwha Ocean Co. Ltd. of South Korea, headed by Senior Vice President Jin Su Lee, traveled to India. They met representatives from the state-owned Cochin Shipyard Ltd., Hindustan Shipyard Ltd., L&T Shipbuilding Ltd., and Swan Defence and Heavy Industries Ltd.’s Pipavav Shipyard. Officials from the Ministry of Ports, Shipping, and Waterways also met with the South Korean group.
The two nations are looking into working together in the shipbuilding industry. South Korea has reserved its yards through 2028, while India aims to rank among the world’s top 10 shipbuilders by 2030 and among the top five by 2047. Over 50,000 ships will be constructed over the next 30 years, according to statistics. India currently accounts for less than 1% of the world’s shipbuilding market. In order to create shipbuilding and ship repair clusters in India, TK Ramachandran, Secretary of the Ministry of Ports, Shipping, and Waterways (MoPSW), stated in 2024 that India is looking to South Korea and Japan for investments and knowledge transfer. Gujarat, Odisha, and Andhra Pradesh have all indicated an interest in creating maritime clusters.
The South Korean shipbuilding sector is dominated by three big shipyards: Samsung Heavy Industries, Hanwha Ocean, and HD Hyundai Heavy Industries. In 2024, HD Korea Shipbuilding, Hanwha Ocean, and Samsung Heavy Industries respectively secured orders for 112 vessels worth $12.1 billion, 26 vessels worth $5.7 billion, and 22 vessels worth $4.9 billion.
China has been the top shipbuilder in the world for 14 consecutive years. It is a market leader in tankers, containers, and bulkers. In the last decade, China has invested in dual-use shipbuilding capacity, and its order books extend till 2029, and it has no yard space till 2027. The demand for new ships is fuelled by the need to replace aging vessels and by the growing requirement for low-carbon ships.
China has captured 62.9 percent of the global shipbuilding orders. The Chinese yards have shifted their focus to more complex ship types, particularly gas carriers. The economic impact of the Chinese shipbuilding revenue surged dramatically to US$ 67.9 billion in the first two months of 2024, up 173 percent year-on-year. China’s shipbuilding order book surged by 88.3 percent to 2,539 vessels, holding 55.5 percent of the global total. South Korea and Japan’s order books comprise 31.3 percent of the total.
An Indian delegation had visited South Korea, the first visit of its kind in nearly a decade, and had an extensive tour of the country’s top three shipyards. They also received a detailed briefing on the shipyard’s advanced technologies and eco-friendly shipbuilding processes.
Taking a leaf out of the South Korean shipbuilding industry, India has proposed Rs 25,000 crore Maritime Development Fund (MDF), which will provide long-term, low-cost financial support and push towards indigenous ship-building. This has come in the wake of India’s lack of a financing ecosystem for the shipping industry. Entire value chain financing, insurance, ownership of ships, leasing, recycling, and repairs of ships happen abroad.
The Indian Shipping Ministry has put together a new shipbuilding policy that is expected to come into effect in 2026. Sustainability is at the center of this new policy. India intends to join the growing green shipping business by providing 30 percent financial help for ships that run on green fuels like methanol, ammonia, or hydrogen fuel cells. Additionally, 20 percent financial assistance will be provided to ships with electric or hybrid propulsion systems.
The new policy will provide viability gap funding (VGF) or financial support to make projects commercially feasible – for domestic shipbuilding. It is also contemplating introducing purchase preference so that any vessel seeking new registration for coastal cargo transport in India from fiscal year 2031 onwards would need to necessarily be built at a domestic shipyard.
