State-run Shipping Corp of India to buy 26 local vessels in $2 bn deal

State-owned Shipping Corp. of India, the country’s largest shipping line, is working on a plan to purchase 26 India-made ships for ₹19,820 crore ($2.3 billion) as part of a government initiative to boost the domestic shipbuilding industry, according to people familiar with the matter. 

The ships will have cumulative internal volume of 1.18 million gross tonnes, and delivery will be staggered over several years as they are completed, said the people, who weren’t authorised to speak publicly. 

 

It comes amid a wave of orders from other buyers in India’s petroleum and natural gas, steel and fertilizer sectors, who along with SCI plan to procure a grand total of 207 ships valued at nearly ₹1.5 trillion, the people said. This plan is part of an existing initiative to purchase 112 crude carriers through 2040, as the world’s third-biggest importer of oil seeks to build out its tonnage, Bloomberg News reported earlier.

 

The deal will significantly bolster SCI’s fleet, which currently consists of 55 ships including tankers, bulk carriers, liners and offshore supply ships.

 

SCI, India’s shipping ministry and the government’s Press Information Bureau did not immediately respond to emails seeking comments.

 

Prime Minister Narendra Modi’s government earlier this year announced a ₹25,000 crore fund to support the country’s maritime sector, with one of its goals being to eventually reduce reliance on foreign-built vessels and bolster indigenous shipbuilding capacity. 

 

India aims to raise the share of locally built tankers to 7 per cent by 2030 from 5 per cent today, the people familiar said, with an eye toward increasing it to close to 70 per cent by 2047 — the deadline the country has set for graduating to a developed nation.

 

The government’s effort is designed to spur captive demand for ships, aiding India’s still-nascent shipbuilding industry and attracting investment from global shipbuilders, including those in Japan and South Korea.