From attracting export orders from global shipping companies to rolling out financial incentives and planning mega shipbuilding clusters, India is making its most ambitious push yet to emerge as a global shipbuilding destination.
Mint explains why the government believes the timing is right to transform the country into a global shipbuilding hub.
Why is India making shipbuilding a strategic priority now?
The country's renewed focus on shipbuilding is driven by a combination of geopolitical shifts, global supply chain diversification and its ambition to become a major manufacturing nation.
It currently accounts for less than 1% of global shipbuilding, a market overwhelmingly dominated by China, South Korea and Japan. But New Delhi sees an opportunity as shipping companies look to diversify production bases while global demand for commercial vessels remains robust.
Shipbuilding also fits into the country's broader industrial strategy. The sector creates high-skilled jobs, supports the steel, engineering, and electronics industries, boosts exports, and strengthens maritime security.
It also complements its long-term vision of becoming a global logistics and manufacturing hub while reducing dependence on imported ships.
Are global customers beginning to trust Indian shipyards?
Indian shipyards have secured sizeable export orders. State-owned Cochin Shipyard Ltd (CSL) has secured an order from French shipping giant CMA CGM to build six feeder container vessels of around 1,700 twenty-foot equivalent unit (TEU) capacity. While the order value has not been disclosed, it marks one of the most significant commercial export contracts won by an Indian shipyard.
Private player Swan Defence & Heavy Industries has also secured orders for six specialized chemical tankers from Norwegian shipping company Rederiet Stenersen and four Kamsarmax bulk carriers from New Energy One (NEO) or NEO Fund, an investment fund registered in the Jersey Channel Islands that focuses on funding green assets.
On the domestic front, Mazagon Dock Shipbuilders Ltd has received an order worth around ₹330 crore from the Shipping Corporation of India for a methanol-dual-fuel platform supply vessel, reflecting the country's push towards green shipping technologies.
What kinds of ships can India build today?
Indian shipyards are rapidly moving beyond small and medium-sized vessels to more sophisticated commercial ships.
Current capabilities include feeder container vessels, chemical and product tankers, Kamsarmax bulk carriers, offshore platform supply vessels, anchor-handling tugs, dredgers, LPG carriers, including very large gas carriers (VLGCs), as well as green vessels powered by LNG and other alternative fuels.
The government says demand aggregation has already identified a one-year procurement pipeline of 62 vessels across multiple categories, reflecting increasing diversification.
Meanwhile, engineering companies such as Larsen and Toubro Ltd have begun participating in commercial shipbuilding tenders covering platform supply vessels, medium-range tankers, container vessels and VLGCs.
How is the government incentivizing investment?
The government’s strategy combines immediate demand creation with long-term financial support.
Around 437 vessels have been identified under the demand aggregation programme, with procurement for 62 vessels planned during the first year. Expressions of Interest or tenders have already been floated for 38 vessels, with contract awards expected shortly.
The Shipbuilding Financial Assistance Scheme (SBFAS), revamped in September 2025, has also started attracting industry participation. Since then, 36 applications covering contracts worth around ₹8,000 crore have been received, with eligible government financial assistance estimated at over ₹1,700 crore.
The broader financing framework comes through the Maritime Development Fund (MDF). The government has earmarked ₹25,000 crore for financial aid between FY26 and FY36. This includes a proposed ₹20,000 crore Maritime Investment Fund, which could eventually expand to ₹30,000 crore with private participation, alongside a ₹5,000 crore Interest Incentivization Fund to lower borrowing costs for maritime projects.
Together, these measures seek to address one of India’s biggest disadvantages: high financing costs compared with global competitors.
How is India expanding its shipbuilding capacity?
Capacity creation is perhaps the most ambitious element of the government’s strategy.
In-principle approval has been granted for two greenfield shipbuilding clusters in Thoothukudi, Tamil Nadu, and Dugarajapatnam, Andhra Pradesh.
The Thoothukudi cluster, spread across more than 2,000 acres, is designed to build vessels of up to about 300,000 deadweight tonnes (DWT). Tamil Nadu has also signed a memorandum of understanding with HD Korea Shipbuilding & Offshore Engineering to develop what could become one of India’s largest shipyards, with an annual capacity of 2.5 million gross tonnage (GT).
The Andhra Pradesh cluster will cover roughly 2,700 acres and is planned with an annual capacity of around 1.2 million GT.
Three more locations—Kuchadi in Gujarat, Dighi in Maharashtra and Kendrapada in Odisha—have also been identified for future shipbuilding clusters.
Overall, the government estimates investments of around ₹9,930 crore for these greenfield hubs, with common infrastructure including breakwaters, basins and maritime industrial facilities.
Existing shipyards are expanding too. Swan Defence plans to expand its Pipavav yard, Titagarh Naval Systems is developing a new facility at Falta, West Bengal, while CSL is establishing a ₹1,570-crore ship repair complex at Vadinar in Gujarat that will be capable of servicing around 34 ships annually.
Can India compete with China, South Korea and Japan?
India still faces formidable challenges before it can emerge as a leading global shipbuilder.
China alone accounts for well over half of global shipbuilding output, supported by decades of investment, integrated supply chains and strong export financing. South Korea and Japan also retain technological leadership in high-value vessels.
India must still build deeper supplier ecosystems, improve productivity, shorten construction timelines and enhance access to competitive financing.
However, policymakers believe the ingredients for long-term growth are gradually falling into place. Export orders from global shipping companies demonstrate improving credibility; domestic demand aggregation provides visibility for shipyards; financial support reduces investment risks; and new clusters aim to create integrated manufacturing ecosystems.