India Aims for 100 New Merchant Ships Amidst Reforms
By Business Desk
India plans to add 100 merchant ships in five years, boosting domestic tonnage and reducing foreign freight costs through reflagging incentives and fiscal reforms.
India is set to significantly expand its merchant shipping fleet, aiming to add 100 new vessels within the next five years. This ambitious plan was announced by Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal.
The initiative forms a core part of a broader strategy to bolster the domestic shipping sector, primarily by increasing India’s tonnage and reducing the substantial freight bill currently paid to foreign vessels.
Strategic Expansion and Economic Impact
This expansion addresses Prime Minister Narendra Modi’s concern regarding the country’s reliance on foreign carriers, who are projected to collect a freight bill of ₹6 trillion by September 2025.
A key mechanism for growth involves encouraging foreign shipowners to reflag their vessels under the Indian flag. Several major international carriers have already undertaken this process, with more expected to follow.
Currently, the Indian flag covers 1,600 vessels, and the government is actively supporting shipbuilding through financial assistance and various shipyard development schemes.
Navigating Operational Hurdles
Despite these supportive measures, the Indian shipping industry faces significant operational challenges.
Anil Devli, CEO of the Indian National Shipowners Association, highlighted that Indian shipowners experience operating costs that are 16-20 percent higher than their foreign counterparts due to various tax burdens.
A Five-Pillar Roadmap for Growth
To mitigate these issues and foster a more competitive environment, a comprehensive five-pillar roadmap has been proposed. This strategic framework includes crucial areas for reform.
The roadmap focuses on fiscal reform, assured cargo support, improving access to competitive financing, regulatory streamlining, and enhancing the overall ease of doing business within the sector.
Vision for Maritime Leadership
If successfully implemented, these proposed measures are expected to enable India to achieve its target of adding 100 ships.
This progress would also move the nation closer to its ambitious Maritime Amrit Kaal Vision 2047 goal, which aims for India to rank among the world’s top five ship-owning nations.