India Unveils Ambitious $10 Billion Initiative to Strengthen Energy Independence and Revitalize Shipbuilding Industry

By Mihir Mishra (Bloomberg) — India is gearing up to invest a whopping 850 billion rupees (around $10 billion) to acquire 112 crude oil carriers by 2040, as it aims to bolster its own shipping fleet.as the third-largest oil importer globally, having a dedicated fleet is crucial for securing energy supplies.Currently, state-owned oil firms rely heavily on an aging fleet that’s mostly chartered from international companies, but that’s about to change.

The initial phase of this ambitious plan includes acquiring 79 vessels,with around 30 being medium-range tankers. Excitingly, the first order for ten tankers could be announced as soon as this month! Though, there’s a catch: only ships constructed in India—irrespective of foreign partnerships—will be eligible for purchase.

Even with the global shift towards cleaner energy sources, India’s crude refining capacity is projected to grow considerably—from approximately 250 million tons now to an remarkable 450 million tons by the decade’s end. this expansion reflects both domestic and international demand for oil products. For a country that imports most of its crude needs, having adequate shipping capabilities is essential for maintaining energy trade.

india aims to increase locally built oil tankers in its fleet from the current 5% to 7% by 2030 and eventually ramp it up to an ambitious target of 69% by the time it reaches developed nation status in 2047.While there hasn’t been any immediate response from government officials or ministries regarding thes developments, Prime Minister Narendra Modi’s administration recently unveiled a substantial fund worth ₹250 billion aimed at enhancing India’s maritime sector. A key goal here is reducing dependence on foreign-built vessels while boosting local shipbuilding capabilities.

In addition to crude carriers, India plans on expanding shipping capacity for coal transport along with fertilizers and steel—again focusing on utilizing domestically produced ships moving forward.

However, challenges remain; India’s shipbuilding industry still lacks scale due largely to insufficient demand within the country itself. The hope is that once global shipbuilders establish operations in India and cater not just locally but also internationally,economies of scale will emerge naturally.

Take MT Maharshi Parashuram—the largest Indian-built tanker at a length of just over238 meters and capable of carrying around93 thousand metric tons—but even this impressive vessel pales next to China’s Oceania supertanker wich stretches out at380 meters long with nearly half-a-million metric tons capacity!

To stimulate local shipbuilding demand further,India has been actively courting major players like Japan’s Nippon Yusen KK (NYK Line) and South Korea’s Samsung Heavy Industries Co., offering incentives for collaboration. Reports suggest HD Hyundai Heavy Industries co., based in South Korea,is also eyeing partnerships with Cochin shipyard Ltd., located along India’s southwestern coast—a promising sign indeed!

Rajiv Jalota—a former chairman at Mumbai Port Trust—expressed optimism about these developments: “From an energy security standpoint,this initiative makes sense given our high reliance on China.” He emphasized how vital it is for nations worldwideto explore alternatives moving forward!