India is formulating a new strategy to bolster its fleet of merchant ships, as a current ₹1,624 crore initiative falls short of expected targets. The government aims to enhance its presence in global marine trade, necessitating the import of 200 ships, valued at approximately ₹1.3 lakh crore, to support sectors like steel, fertilizers, and petroleum. Interministerial discussions highlight the urgent need for this fleet, which will be jointly owned by public sector firms and built in Indian shipyards.
The Ministry of Ports, Shipping, and Waterways (MoPSW) is working with other ministries to address low imports of Indian-flagged ships. Experts note that since the scheme’s launch in 2021, the percentage of cargo transported by these vessels remains around 8%. With only ₹330 crore disbursed to date and a continued single-digit share of Indian-flagged ships, a review of the current scheme is anticipated to ensure its effectiveness.
The share of Indian vessels in the country’s export-import trade has drastically declined from 40.7% in 1987-88 to approximately 7.8% in FY19, leading to an annual foreign exchange outflow of around $70 billion to foreign shipping lines. The higher operational costs for Indian-flagged ships, largely due to domestic regulations and taxes, have prompted calls for reduced duties and taxes to support the domestic maritime industry.
