State-owned Cochin Shipyard Ltd (CSL) may join hands with Hyundai Heavy Industries for a new facility in Kochi, the people said on the condition of anonymity. Cochin Shipyard confirmed the talks, but did not identify the future partner. A Hyundai team had visited India early this year for a preliminary survey for investing in Indian shipbuilding.
“We are close to signing a deal with an overseas shipbuilder from Korea or Japan that would be making hulls for large ships,” said Madhu S. Nair, chairman and managing director, Cochin Shipyard. “We already have a large 310 m dry dock that can also be used by the new joint venture for making ships of different sizes up to 300 m in length. A foreign partnership will help in bringing technology and scale required for making large ship hulls using tonnes of steel. The new facility should roll out ships in double-digits to meet both domestic and overseas demand,” Nair added.
New facility
Land for the new facility will be provided by the government-owned Cochin Port Trust, close to Cochin Shipyard’s existing facility in Kochi, one of the two people said. The new facility will build cargo ships, container vessels, tankers, dry bulk cargo ships and multi-purpose vessels. It would, however, not make very large crude carriers (VLCCs) due to infrastructural shortcomings, but may consider it later depending on market conditions.
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Separately, Korean shipbuilder Hanwha is scouting for partnerships with both government and private entities in India, the second person said. The company may consider a shipbuilding facility planned near Gujarat’s Kandla Port, a Union government-owned port with ample land and basic infrastructure for shipbuilding and repairs. Also, a team from Japanese ship maker Mitsui OSK Shipping is expected in India around June, the people said. Among the main tasks for the group would be to seek local partnerships.
“The first deal for a large shipbuilding facility may be reached in the next couple of months, with a few other deals expected before the end of the current year. Ship manufacturing in India will help the country become a major hub for ships after Korea, Japan and China,” said the second person.
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Queries sent to the ports ministry, Hyundai Heavy Industries, Hanwha Ocean and Mitsui remained unanswered. Mint had reported in September that India is looking for investments from Korea and Japan for its shipbuilding ambitions.
Shipping boost
India is not alone in trying to breathe life into its shipbuilding industry. In February, US President Donald Trump slapped fees of up to $1.5 million on Chinese-built ships entering the US, with charges of up to $1 million on both fleets that have ordered new Chinese ships and non-Chinese vessels in fleets with Chinese ships. The move aims to rebuild American shipyards. The global shipbuilding industry is currently dominated by massive shipyards in China, South Korea and Japan; however, these facilities are overbooked, with waiting periods running from three to five years.
“Investments and technology transfers from countries like South Korea and Japan are being sought by the Indian government,” said Pushpank Kaushik, CEO of Jassper Shipping, a Hyderabad-based shipping and logistics company. “Support has been expressed by states like Andhra Pradesh, Gujarat, and Odisha for setting up maritime clusters. A detailed briefing on advanced and eco-friendly shipbuilding was also received from South Korea. Large commercial shipbuilding in India remains limited, even though 28 shipyards exist. Most ship repairs are handled overseas. However, with foreign support and partnerships, domestic capabilities are expected to improve, and larger ships may be constructed,” Kaushik added.
Global hub
India is trying to become a global hub for ships, and push up local ship ownership by scaling Indian-built and Indian-owned and flagged cargo ships. The country’s share in global shipbuilding remains below 1%. The government’s projection is raise the share of Indian built ships in India’s fleet from 5% at present to 7% by 2030 and 69% by 2047 under the Atmanirbhar Bharat initiative. The plan is to set four mega shipbuilding parks, two each on the east and west coasts. Shipping minister Sarbananda Sonowal has said that two shipbuilding parks would be made operational by 2030, eyeing a share of the $100 billion global shipbuilding market.
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Cochin Shipyard’s Nair said that while the investment details and the nature of equity partnership of its new venture are being worked out, such a facility would require investments in thousands of crores of rupees and create employment for over 2,000 people. A modern shipbuilding facility typically costs $5-6 billion for construction, port infrastructure and ancillary services. Since a dry dock facility is already available in Kochi, the new facility may require less.
In July last year, Mint reported that to create a market for domestic shipbuilding, the shipping ministry has proposed a joint venture of the state-run Shipping Corp. of India (SCI) with public sector oil marketing companies to build VLCCs. This venture may also rope in a foreign technology partner. Shipping minister Sarbananda Sonowal told Mint in September that the government has launched a mega ship-building mission to develop mega shipbuilding parks along both coasts, and ministerial teams had visited South Korea and Japan to seek their investment in parks, and at least three state governments have agreed to provide land.
Maritime fund
Earlier this year, the FY26 budget proposed a ₹25,000 crore Maritime Development Fund, a government-industry partnership to help develop manufacturing clusters with a focus on shipbuilding and breaking. The budget also proposed revamping the existing Shipbuilding Financial Assistance (SBF) policy to address cost disadvantages, while also providing credit notes for shipbreaking to help purchase indigenously-built ships. The budget also included large ships in the infrastructure harmonized master list (HML) allowing purchase of ships on easier terms while providing basic customs duty exemption on raw materials, components, consumables or parts for the manufacture of ships extended for another 10 years.
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Under the Maritime Vision 2030 and Vision 2047 plan, the government is targeting to make India one of the top 10 and among top five shipbuilding and shipowning country’s worldwide respectively. The shipbuilding initiative would also address a concern of the trade about the uncertainty and variability (escalation) of shipping cost impacting their market competitiveness. With better availability of domestic shipping lines at affordable prices, the freight rate volatility due to Black Swan events like the covid pandemic, the Russia-Ukraine war and the Red Sea crisis could also be checked.
