To Build Ships, India Must Look East

The global supply chain is shifting rapidly owing to the great power contestations and the production associated with certain key strategic industries. These changes present significant concerns for a country such as India, which relies on other states for its products. Shipbuilding is one of these key industries, with enormous potential and significant effects on India’s maritime, energy, and economic security. Given its strategic importance, India is putting more effort into developing a domestic industrial cluster. Nonetheless, New Delhi is also attempting to establish strategic partnerships with major South Korean and Japanese corporations while enhancing domestic efforts. This article aims to map out India’s shipbuilding ambitions and its expansion within Northeast Asia.

India’s Rising Shipbuilding Endeavour

India’s endeavour to establish a holistic shipbuilding sector began in 2016. It gained significant momentum with the 2025 annual budget announcements, which presented the funding plans for the Maritime Development Fund (MDF) of INR 25,000 crores, mega shipbuilding clusters, and Shipbuilding Financial Assistance Policy (SBFAP) 2.0. These announcements also align with the Indian Maritime Vision 2030 and Amrit Kal Maritime Vision 2047—two critical policy documents that lay out the strategic objectives India aims to accomplish in the shipbuilding sector. According to the vision, India intends to become a part of the top 10 and top 5 nations by 2030 and 2047 respectively, and increase its indigenous domestic fleet of ships from 5 to 7 percent by 2030 and 69 percent by 2047. India also wants to set-up two operational mega shipbuilding parks by 2030. Collectively, these fiscal and non-fiscal central policies have created a better environment for foreign shipbuilding and allied sector investors.

However, in addition to their respective efforts, the challenge remains to attract foreign investors, which is critical for accomplishing these ambitious goals. This requires a comprehensive strategy, driven by close coordination and collaboration between the state and centre, through intensive diplomacy, extending fiscal and non-fiscal incentives, and political action

While the central government does most of the heavy lifting, coastal states also pitch in with their limited capacities and resources. The state intends to benefit from India’s upcoming eight major shipbuilding clusters, supported by the centre’s INR 75,000 crore budget. Out of these five, two will be greenfield, and the remaining three will be expansions of existing facilities (Vadinar, Kandla, and Kochi ports). These six shipbuilding clusters will be established across its west and east coastal states—Maharashtra, Andhra Pradesh, Tamil Nadu, Gujarat, Odisha, and Kerala. Their focus will be on shipbuilding and ship repairs.

Among the five states competing for investments, some have shown greater interest in setting up shops and have announced additional incentives and policies to make themselves more attractive to foreign investors, as indicated in Table 1. For instance, Maharashtra aims to utilise the opportunity to develop facilities focusing on repair, recycling, and shipbuilding. Through these facilities, the Maharashtra Maritime Board (MMB) expects to generate 40,000 jobs by 2030 and draw an investment worth INR 6600 crores. Similarly. Andhra Pradesh has also established a logistics corporation and has changed the state’s maritime policy, aligning with the central government.

Table 1: Shipbuilding Clusters under Planning in India

Source: Compiled by Author

These policies—introduced by several states—aim to supplement the central government’s efforts towards creating shipbuilding infrastructure. States such as Gujarat plan to give additional incentives to the centre’s SBFAP 2.0. Other states are offering a multitude of models for the development of shipbuilding and shipyards. These projects include developing yards at Greenfield Port, shipyards at private operational ports, and on a standalone basis. However, in addition to their respective efforts, the challenge remains to attract foreign investors, which is critical for accomplishing these ambitious goals. This requires a comprehensive strategy, driven by close coordination and collaboration between the state and centre, through intensive diplomacy, extending fiscal and non-fiscal incentives, and political action.

Partnering with Japanese and Korean Shipbuilding Companies

While the national and state-level developments lay the foundations for establishing shipbuilding and allied industries, India must establish global partnerships with major shipbuilding companies—especially the Korean and Japanese—to ensure holistic development. To fructify and sustain long-term, New Delhi (and state capitals too) must leverage its ties with Seoul and Tokyo in the shipbuilding sector, focusing on a specific aspect of the industrial supply chain.

Although initial developments have taken place, more needs to be done. In 2024, a ministerial delegation visited South Korea’s big three (HD Korea Shipbuilding and Offshore Engineering, Hanwha Ocean, and Samsung Heavy Industries) and Japan to explore opportunities for industrial collaboration. Furthermore, Sarbananda Sonowal, India’s Minister of Ports, Shipping and Waterways, also met with Terada Moshimichi, the Japanese Minister of Infrastructure and Transport, to discuss deepening partnerships between Indian and Japanese shipyards. They explored the possibilities of joint ventures and collaborative arrangements, particularly with Mitsubishi Heavy Industries, Imabari, Kanagawa Dockyards, and Japan Marine United Corporation (JMUC). Observing these the policy changes in India, delegations from Hanwha Ocean and Imabari Shipbuilding visited India to explore potential for industrial collaboration.

Korean companies have also expressed their interest in partnering with India in the sector. HD Korea Shipbuilding and Offshore Engineering (KSOE) and Cochin Shipyard, India’s largest state-owned shipbuilder, signed a Memorandum of Understanding (MoU) to pursue strategic cooperation in areas of shipbuilding and maritime development, facilitating joint efforts in upskilling the workforce, sharing of technical expertise to improve standards, and enhancing productivity and capacity utilisation. Korean companies consider this partnership lucrative due to the expanding market, extensive port infrastructure, and lower labour costs. This is part of Korea’s expansion plans to partner with countries that act as a ‘springboard’ for it. For instance, this plan included Korean major Hanwha Ocean and Hanwha Systems’ decision to acquire the United States (US) Philly Shipyard in 2024.

Partnering with Korean companies will improve the Indian shipbuilding industry, bringing best practices and technological advantage. This partnership will nudge India to further enhance its industrial standards, particularly in health, safety, and environmental standards, delivery schedules, and quality issues the industry faces today

Recently, Hanhwa Ocean also opened its global engineering centre in Noida. The statement highlighted that the decision is focused on ‘strengthening our global engineering capabilities, particularly in the topside detailed design of key offshore projects such as Floating Production, Storage, and Of-floading (FPSOs) and Floating Liquefied Natural Gas (FLNGs).’ Japanese Mitsui O.S.K Lines Limited (MOL) is also looking to invest in an Indian logistics startup as part of its India expansion plan. India can utilise the opportunity to leverage its engagement with Korea and Japan to systematically widen and improve its shipbuilding capabilities.

The bilateral statement released after the recent meeting between India’s External Affairs Minister, S. Jaishankar, with his Korean counterpart Cho Hyun signals strategic alignment in strengthening the shipbuilding partnership. The statement recognised the need to elevate the ties, realising ‘new industrial ambitions’. Given the recent developments in the Korea-US Shipbuilding cooperation, India should fully utilise the opportunity to attract Korean industries. India should engage with Japanese companies that are interested in expanding the shipbuilding sector. Partnering with Korean companies will improve the Indian shipbuilding industry, bringing best practices and technological advantage. This partnership will further encourage India to enhance its industrial standards, particularly in health, safety, environmental standards, delivery schedules, and quality-related issues that the industry faces today. It will also improve metrics such as the quality and schedule, which are critical for the customers. Similarly, given the tense air surrounding India-China ties and the latter’s control over the shipbuilding sector, Seoul and Tokyo would also do better in forging a strategic partnership in shipbuilding, which will further deepen the industrial cooperation between the countries.

Japanese and South Korean companies have forged successful businesses in India, building infrastructure and a manufacturing ecosystem, such as railway infrastructure, electronics manufacturing, and Information Technology (IT) hardware projects. This highlights that the partnership can also be leveraged for shipbuilding and allied sectors. Going forward, India’s struggle to make its aspiration a reality will require political action and policy handholding, providing fiscal and non-fiscal incentives to attract foreign investors. Compared to developing a semiconductor ecosystem domestically, this would be an even more difficult undertaking for India.

source : orfonline