‘If there’s a good time, it is now’: Former shipping secretary on India’s shipbuilding push

India is stepping up efforts to build a globally competitive shipbuilding industry through an ecosystem-based approach that combines demand aggregation, shipyard infrastructure, financing support and incentives for domestic ship ownership, T K Ramachandran, former secretary in the Ministry of Ports, Shipping and Waterways, said on Thursday at Sagarmanthan: The Great Oceans Dialogue 2026 in New Delhi.

Ramachandran said that a series of legislative reforms and a ₹ 70,000-crore package announced last year marked a turning point for India's maritime sector.

“Last year was a very important period in the history of the Indian shipbuilding sector, maritime sector,” he said, referring to the enactment of five laws and the government's financial support package designed to strengthen the industry over a 10-year period.

India adopts an ecosystem approach to shipbuilding

Ramachandran said the government’s strategy aimed to address challenges on both the demand and supply sides, which had previously prevented Indian shipyards from expanding capacity and attracting orders.

“We followed an ecosystem approach where we looked at both the demand side and the supply side,” he said, adding that India ranked around 16th globally in shipbuilding at the time of the discussion.

One of the key measures was demand aggregation, which seeks to provide shipyards with predictable orders and greater long-term visibility. The government identified demand for more than 100 vessels over the following two years, he said.

Financing and incentives to support domestic shipbuilding

Ramachandran said the government had also focused on addressing the cost gap between building ships in India and procuring them overseas, as well as measures to strengthen ship ownership and financing.

The Maritime Development Fund provides equity support to businesses across the maritime sector, including shipping, ports and waterways. An interest incentive scheme offers interest subvention of up to 3%, he said.

Another significant measure was granting infrastructure status to shipping, which allows companies to access longer loan tenures and lower borrowing costs.

“Earlier, since shipping was not infrastructure, your tenures were just about five or six or seven years. But now you can go up to 25 years,” Ramachandran said.

The financing changes are intended to improve the viability of capital-intensive shipbuilding projects and encourage greater private investment.

Green vessels and ship recycling create fresh demand

Ramachandran said the government's strategy also accounts for the replacement of ageing vessels, growing demand for green shipping technologies and opportunities arising from ship recycling.

He pointed to incentives under which 40% of the value of a ship recycled in India can be claimed as a credit, subject to conditions, when the ship is built domestically.

He said the measures were beginning to attract interest from major international companies, including Mediterranean Shipping Company (MSC), which has placed shipbuilding orders in India.

Ramachandran also highlighted the establishment of a technology centre to support research and development, design and testing, areas he described as important to developing domestic shipbuilding capabilities.

The combination of policy reforms, financial incentives, infrastructure development and rising demand has generated greater interest in India's maritime industry, Ramachandran said.

He argued that the sector's prospects extend beyond green vessels, with replacement demand, ship recycling and the development of domestic manufacturing capabilities providing additional opportunities for growth.

“If at all, if there is a good time to enter into the maritime industry in India, it is now,” he said.

About the Author

Bhanu Pratap is a journalist who reports and writes on foreign affairs, India’s foreign policy, geopolitics and strategic affairs. He closely follows diplomatic developments in New Delhi and has a keen interest in defence and national security.<br> <br> Bhanu also focuses on in-depth, interview-based reports and regularly speaking with experts and policymakers to bring perspectives and context to major developments around the world.<br> <br> He is also interested in stories with strong humanitarian angles.<br><br> One such report examined the cases of Indian nationals who were allegedly recruited and forced into Russia’s war against Ukraine. While reporting the story, Bhanu spoke to the families of those affected and documented their experiences. The report was later taken into account by the United Nations in its findings on human rights violations linked to the war in Ukraine.<br> <br> For Bhanu, the zeal to produce meaningful and impactful journalism remains at the heart of his work.<br> <br>He has previously worked with Firstpost, NDTV, Newslaundry and Republic.<br><br> Bhanu studied at the Delhi School of Journalism, University of Delhi. He initially chose science with plans to pursue engineering, influenced by conventional expectations, but fate had other plans and eventually led him to journalism.<br><br> Beyond the newsroom, Bhanu enjoys exploring culture and history and often spends his days off on heritage walks. He is also passionate about travelling, biking and listening to folk music.<br> <br>For tips, reviews and suggestions, you can reach him at bhanu.pratap@htdigital.in.