Indian media reports that India is attracting top South Korean shipbuilding companies such as HD Hyundai Heavy Industries, Hanwha Ocean, and Samsung Heavy Industries for technical cooperation and joint ventures to advance its ambitious shipbuilding policy, which is expected to receive government approval soon.
According to reports, a high-level official delegation led by T K Ramachandran, Secretary of the Indian Ministry of Ports, Shipping and Waterways, recently visited the three major South Korean shipyards—Samsung Heavy Industries, Hanwha Ocean, and HD Hyundai Heavy Industries. The visit aimed to learn about the shipbuilding technologies and processes of the world’s second-largest shipbuilding nation and to explore potential technical cooperation and joint ventures between the two countries.
The delegation members included R Lakshmanan, Joint Secretary of the Ministry of Ports, Shipping and Waterways (responsible for shipbuilding); Madhu Nair, Chairman and Managing Director of Cochin Shipyard; and B K Tyagi, Chairman and Managing Director of Shipping Corporation of India.
India is the 16th largest maritime country in the world. In terms of trade volume and trade value, maritime trade accounts for 95% and 70% of India’s trade, respectively. Despite the significance of maritime trade, India is highly dependent on foreign resources. In the fiscal year 2019-2020, Indian companies spent $85 billion on maritime transport and paid $75 billion in charter fees for foreign ships. With the continuous growth of imports and exports, this expenditure is expected to increase to $400 billion by 2047.
To reduce shipping expenses, the Indian government plans to expand its own fleet by 1,000 ships within 10 years. The goal is to reduce the freight costs paid to foreign carriers by one-third by 2047, thereby decreasing reliance on foreign shipping companies.
India currently has about 1,500 tankers, gas carriers, container ships and dry cargo ships. To achieve the goal of fleet expansion, a significant number of new ships are expected to be built, but this will be constrained by the limited capacity of domestic shipyards.
There are 28 shipyards in India, of which 6 belong to the central government, 2 belong to the federal government, and 20 are private enterprises. These shipyards mainly build small and medium-sized ships and have no experience in building very large crude carriers (VLCCs), Capesize (over 80,000DWT) bulk carriers, Suezmax (130,000 to 150,000DWT) tankers, and large or even ultra-large container ships, not to mention some high-end ship types such as liquefied natural gas (LNG) carriers and liquefied petroleum gas (LPG) carriers, floating storage and regasification units (FSRUs), and car carriers.
India is eager to develop its domestic shipbuilding industry. Indian Prime Minister Narendra Modi announced during the Global Maritime India Summit 2023 that “In the next decade, India will become one of the top five shipbuilding and repairing countries in the world.” However, India currently accounts for less than 1% of the global shipbuilding market.
Realizing that the initial goals might be unrealistic, last month, India’s Minister of Ports, Shipping and Waterways, Sarbananda Sonowal, revised the targets: “Given India’s rich talent and resources to become a shipbuilding powerhouse, our goal is to enter the ranks of the world’s top ten shipbuilding nations by 2030 and aim to be among the top five by 2047.” To achieve this, the ministry has proposed a series of key policy recommendations, including providing ten-year subsidies and establishing three shipbuilding clusters, and has sought assistance from South Korean shipyards.
A member of the Indian delegation to South Korea revealed that “the talks with the top executives of the Korean shipyards were very fruitful. They expressed strong interest in establishing cooperative relations with Indian shipyards. Some formal agreements are expected to be signed during the visit of Ports, Shipping and Waterways Minister Sarbananda Sonowal to South Korea in March next year.”
It is worth mentioning that representatives from Hanwha Ocean participated in a meeting organized by the Indian Ministry of Ports, Shipping and Waterways on July 4 to discuss ways to revitalize India’s shipbuilding industry. Additionally, senior executives from the Export-Import Bank of Korea visited India in late October to discuss maritime cooperation, including shipbuilding and repairs.
In recent years, South Korea’s shipbuilding industry has faced fierce competition from Chinese shipyards, causing it to fall from its leading global position to second place. South Korean shipyards are seeking new business development paths, and cooperation with India in shipbuilding is likely to be a perfect fit.