CARGOCONNECT-AUGUST 2025 - Flipbook - Page 14
AVANT- GARDE
Setting a New Course:
India Reclaims
Its Place in Global
Shipping
I
ndia is preparing to recalibrate its
maritime strategy in a bold attempt
to reclaim a meaningful share of
global shipping. After decades of ceding ground to foreign carriers, the
government is charting a new path — one
that aims to reduce foreign dependence,
support domestic industry, and anchor India
昀椀rmly in the heart of global maritime trade.
At the centre of this renewed vision is a
blueprint for expanding the Indian-昀氀agged
merchant 昀氀eet. The plan includes a 昀氀eet of
around 200 new vessels, with a combined
gross tonnage of 8.6 million GT and an
estimated value of `1.3 lakh crore. These
vessels will primarily serve the country’s
strategic import needs in petroleum, steel,
and fertiliser — sectors that form the industrial backbone of the economy.
These ships are set to be built in Indian
shipyards and jointly owned by public sector
enterprises, providing a dual boost: revitalising the nation’s shipbuilding ecosystem and
building national capacity to control a larger
share of its own cargo movement.
A Maritime Reality Check
This strategic overhaul comes at a time when
the existing efforts to incentivise Indian
shipping have failed to move the needle. A
`1,624 crore subsidy scheme launched in 2021
was intended to level the playing 昀椀eld for
Indian carriers competing in global tenders.
It o昀昀ered 昀椀nancial support for transporting
government cargo such as crude oil, LPG,
coal, and fertilisers.
But nearly four years later, the results
speak for themselves. Only `330 crore has
been disbursed. The share of Indian-昀氀agged
ships in the country’s total import cargo
remains stubbornly stuck at 8% — a 昀椀gure
that hasn’t improved despite the incentives.
The current programme appears on course
to fall short of its objectives, prompting a
rethink at the highest levels.
The Price of Foreign Dependence
India’s retreat in maritime self-reliance has been stark. In the late 1980s,
Indian-昀氀agged ships carried over 40% of the country’s export-import
cargo. Today, that 昀椀gure is under 8%. The vacuum has been 昀椀lled by
foreign carriers, who now dominate the movement of Indian trade,
14 | CARGOCONNECT AUGUST 2025
earning an estimated US$70 billion annually from
Indian cargo alone.
And the trade pie is only growing. Indian ports
handled a record 1,540 Million Metric Tonnes (MMT)
of cargo in FY24, a 7.5% increase year-on-year. But
while cargo volumes are surging, most of the economic
bene昀椀t is being o昀昀shored.
A Domestic Industry Held Back
Indian shipping companies aren’t lacking in ambition,
they’re grappling with structural disadvantages. Operating an Indian-昀氀agged vessel is estimated to be 20%
more expensive than 昀氀ying a foreign 昀氀ag. These higher
costs stem from a combination of regulatory mandates
and 昀椀scal burdens unique to the domestic industry.
Indian-昀氀agged vessels must hire Indian seafarers,
comply with local tax laws, and are taxed on crew
wages, unlike their foreign counterparts. They face
higher borrowing costs and shorter loan tenures,
making capital-intensive ship acquisition less viable.
Moreover, a maze of tax-related issues, from GST on
ship imports without input credits, to discriminatory
tax treatment on coastal routes, continues to erode
their competitiveness.
This uneven playing 昀椀eld has left Indian operators
hamstrung, watching as foreign competitors — free
from these burdens — thrive in the same market.
Reviving Maritime Sovereignty
In response to these mounting challenges, India is now
preparing a new strategy grounded in public-private
investment, shipbuilding revival, and structural reform.
The goal is not just to own more ships, but to rewire the
maritime ecosystem to favour long-term self-reliance.
At the core of this strategy lies a fresh commitment
to nurturing Indian shipyards, aligning the needs of
strategic sectors with domestic capability, and ensuring
Indian-昀氀agged vessels have the infrastructure, capital
access, and policy support needed to compete globally.
It’s not just about economics, it’s about sovereignty.
In a world of shifting geopolitical currents and supply
chain realignments, controlling the means to move
critical cargo is a matter of national strength.
A Turning Tide
The vision is clear: to reverse the long decline of India’s
presence on the seas and build a resilient maritime
economy that serves both commerce and country. The
challenges are complex, but the direction is decisive.
If India succeeds in this new course by reducing
foreign out昀氀ows, restoring the competitiveness of its
昀氀eet, and modernising its shipping and shipbuilding
infrastructure, it won’t just reduce logistics costs or
save foreign exchange. It will re-establish itself as a
formidable force in global trade.
The time has come to reclaim the waters. Not with
rhetoric, but with ships — 昀氀ying the Indian 昀氀ag, built
on Indian soil, and sailing into global commerce with
renewed purpose.
