India’s long-held ambition to become a serious shipbuilding nation on par with giants such as China, South Korea, and Japan may finally get off the starting blocks in the second half of 2026, at a time when the Asian shipyards are packed with orders, with waiting periods stretching into several years.
In the first instance of a global shipbuilding giant investing directly in core shipbuilding infrastructure in India, state-run Cochin Shipyard Limited (CSL) and South Korea’s HD Korea Shipbuilding and Offshore Engineering (HD KSOE)—part of the HD Hyundai Group—are in final stages of forming a joint venture to set up a $500-million manufacturing facility in Kochi, with both partners contributing equally.
CSL’s chairman and managing director, Jose V.J. said a CSL team would visit South Korea this month to finalise the deal. A team from HD Hyundai Group has already conducted site visits and preliminary assessments, according to Jose.
“We are expecting an agreement with HD Hyundai Group in the second half of 2026 to set up a joint venture that would invest close to ₹4,500-5,000 crore initially to set up a ship block fabrication facility near CSL’s existing shipbuilding facility that also includes a 310-metre dry dock in Kochi,” Jose said.
A block fabrication facility or BFF manufactures ship blocks—large sections of a ship’s hull—that are then assembled in a dry dock.
The joint venture’s BFF will be set up on about 80 acres of land leased to CSL by Cochin Port Trust in Kerala. With an estimated annual capacity of 120,000 metric tonnes, the BFF is expected to generate around 2,000 direct jobs and significantly higher indirect employment across MSMEs, logistics, supply chains and ancillary industries.
By producing ship blocks at the JV’s BFF using Hyundai’s design capabilities, advanced manufacturing processes and global order book access, CSL would be able to construct bigger and more complex vessels than before, including cargo ships, container vessels, tankers, dry bulk carriers, MR tankers, Panamax vessels and multipurpose ships.
However, very large crude carriers (VLCCs) are not part of the initial plan due to infrastructure constraints, although the segment could be explored later depending on market conditions and capacity augmentation, a senior CSL executive said on the condition of anonymity.
CSL plans to leverage its recently commissioned 310-metre dry dock at Kochi—capable of handling vessels up to 300 metres in length—for constructing larger vessels such as Suezmax tankers, container ships and Capesize bulk carriers. The dry dock, inaugurated by Prime Minister Narendra Modi in January 2024, has the capacity to build up to six large vessels annually.
“This partnership will bring technology and scale required for large ship hull manufacturing using thousands of tonnes of steel. With the new facility, we aim to roll out ships in double digits annually to meet domestic as well as overseas demand,” the CSL executive cited earlier said.
The development is part of a broader government push to expand India’s shipbuilding ecosystem through foreign collaborations. Discussions are also underway with other global players in Japan and South Korea for potential partnerships in different locations.
Queries emailed to HD Hyundai Group and ministry of ports, shipping and waterways (MoPSW) last week remained unanswered till press time.
Transformational deal
Anil Devli, chief executive officer of the Indian National Shipowners’ Association (INSA), said the JV represents a landmark, high-stakes shift in the Indian maritime sector.
“This isn’t just about constructing ship blocks; it is a critical step in reducing India’s turnaround times to global standards and boosting capacity to build larger, more complex vessels. With the memorandum of understanding signed in July 2025 and reinforced throughout the year, this collaboration aligns perfectly with the 'Make in India' initiative and the Maritime India Vision 2030, transforming the Kochi facility into a critical hub for both commercial and naval shipbuilding in the Indian Ocean region,” he said.
While India has previously seen technology collaborations and limited partnerships in ship repair and offshore segments, the CSL-Hyundai deal would be the first large-scale greenfield manufacturing investment by a global shipbuilding major in core hull fabrication infrastructure in the country.
The Kochi facility is expected to serve both Indian public sector buyers and global clients through Hyundai’s export network, enhancing India’s competitiveness in mid-sized and large commercial vessels. It will also reduce dependence on imports for critical ship blocks and modules, a key cost component in ship construction.
Building an industry
India’s share in global shipbuilding remains below 1%, even though the country has 28 shipyards. Most large commercial vessels used by Indian entities are built overseas, and a substantial portion of ship repair work is also undertaken abroad.
To address this gap, the government has unveiled a multi-pronged strategy. The Union budget 2025-26 announced a ₹25,000 crore Maritime Development Fund to support shipbuilding and shipbreaking clusters. The existing Shipbuilding Financial Assistance (SBF) scheme is set to be revamped to address cost disadvantages, and large ships have been included in the infrastructure harmonised master list to ease financing.
The government has also proposed the development of four mega shipbuilding parks—two each on the east and west coasts—with the aim of making India one of the top 10 shipbuilding nations by 2030 and among the top five by 2047 under its Maritime Vision plans.
Industry executives say that with freight volatility triggered by events such as the covid-19 pandemic, the Russia-Ukraine conflict and disruptions in the Red Sea, strengthening domestic shipbuilding capacity could provide strategic resilience and greater control over shipping costs.