'If there's a good time, it's now': Former shipping secretary on Indian shipbuilding pressure

India is stepping up efforts to build a globally competitive shipbuilding industry through an ecosystem-based approach that combines demand aggregation, shipyard infrastructure, financial support and incentives for domestic ship ownership, TK Ramachandran, former secretary, Ministry of Ports, Shipping and Waterways, said at Sagarmanthan: The Great Oceans Dialogue 2026 in New Delhi on Thursday.

Ramachandran said that a number of legislative reforms aa ₹ 70,000 crore package announced last year marked a turning point for the Indian maritime sector.

“Last year was a very important period in the history of the Indian shipbuilding sector, the maritime sector,” he said, referring to the passage of five laws and the government’s financial support package designed to boost the industry over 10 years.

India is adopting an ecosystem approach to shipbuilding

Ramachandran said the government’s strategy aimed to address both the demand-side and supply-side issues that had previously prevented Indian shipyards from expanding capacity and winning contracts.

“We followed an ecosystem approach where we looked at both demand and supply,” he said, adding that India was ranked 16th globally at the time of the discussion.

One of the key measures was demand aggregation, which seeks to provide shipyards with predictable orders and greater long-term visibility. The government has identified demand for more than 100 vessels over the next two years, he said.

Financing and incentives to support domestic shipbuilding

Ramachandran said the government also focused on addressing the cost differential between building ships in India and procuring them overseas, as well as measures to strengthen ship ownership and financing.

The Maritime Development Fund provides capital support to businesses across the maritime sector, including shipping, ports and waterways. The interest incentive program offers an interest subsidy of up to 3%, he said.

Another important measure was the granting of infrastructure status to shipping, which allows companies to access longer loans and lower borrowing costs.

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“Earlier, because shipping was not an infrastructure, your tenure was only about five, six or seven years. But now you can go up to 25 years,” Ramachandran said.

The funding changes are intended to improve the viability of capital-intensive shipbuilding projects and encourage greater private investment.

Green vessels and ship recycling create new demand

Ramachandran said the government’s strategy also anticipates the replacement of aging vessels, growing demand for green transport technologies and opportunities arising from ship recycling.

He pointed to incentives whereby 40% of the value of a ship recycled in India can be claimed as a credit if the ship is built domestically, subject to certain conditions.

He said the measures are beginning to attract interest from major international companies, including the Mediterranean Shipping Company (MSC), which has awarded shipbuilding contracts in India.

Ramachandran also highlighted the establishment of a technology center to support research and development, design and testing, areas he identified as important for the development of domestic shipbuilding capabilities.

A combination of policy reforms, financial incentives, infrastructure development and growing demand has created more interest in India’s maritime industry, Ramachandran said.

He argued that the sector’s prospects extended beyond green vessels, with replacement demand, ship recycling and the development of domestic manufacturing capacity providing further opportunities for growth.

“If ever, if there is a good time to enter the maritime industry in India, it is now,” he said.