Further, yards in Bangladesh and Pakistan pose tough competition as they critically source steel from scrapped ships, thereby offering higher prices for end-of-life ships as compared to Indian yards. Further, India is directly importing a lot of scrap metal, which has reduced its dependence on scrap from ships and this reduced demand has also put Indian ship recyclers in a tight spot. The Hong Kong Convention which comes into effect in June 2025 and the Basel Convention are again set to further tighten rules for ship recycling, requiring the ship owners to obtain an International Ready for Recycling Certificate (IRRC) for a ship’s final voyage to a recycling country.
