India’s shipping industry is heavily reliant on sea transport, accounting for 95 percent of the country’s trade by volume. However, there is little focus on increasing India’s tonnage, as the majority of Indian cargo is carried by foreign flag vessels. Only two companies, the Shipping Corporation of India Ltd (SCI) and The Great Eastern Shipping Company Ltd, contribute around 45 percent of the industry’s total tonnage. India’s shipping fleet currently stands at 20.54 million DWT with 1,520 vessels, ranking 18th in terms of flag of registration and 19th in terms of deadweight tonnage globally. This is relatively small considering India’s growing global trade of nearly $2 trillion.
The dominance of crude oil and product tankers, followed by dry bulk carriers and containers, characterizes India’s shipping fleet. However, the industry faces various challenges, including low labor productivity, high capital costs, and limited availability of parts for shipbuilding. Fluctuations in charter rates and the absence of an active ship financing market have also hindered the growth of India’s fleet. As a result, Indian companies have opted to invest in assets under the Singapore flag, attracted by tax advantages and easier crew availability.
To overcome these hurdles and foster industry growth, stakeholders and regulators need to strike a balance between healthy competition and industry development. The government must encourage Indian companies to invest in the shipping sector and learn from countries like Vietnam and Greece on how to support small and medium-sized maritime businesses and nurture them into global players. By addressing these challenges and promoting a robust shipbuilding ecosystem and ship financing market, India can position itself as a maritime-dominated country.