Bangladesh witnessed substantial political turmoil in 2024, including a coup that transformed the country’s political landscape. This transition, while essentially a domestic issue, has had significant consequences outside its borders, particularly for the Indian ship recycling sector. Bangladesh’s coup occurred amid rising political instability and public unrest. The military intervened to depose the sitting administration, claiming national security risks and governance problems. The coup triggered a period of transition, with the military forming a provisional administration and promising to restore order and enact democratic reforms. However, the immediate aftermath has been characterised by uncertainty and upheaval.
Bangladesh has historically played an important role in the global ship recycling business, particularly in the coastal city of Chittagong (now Chattogram). The country’s shipbreaking yards are among the largest in the world, noted for recycling large vessels and managing large amounts of scrap metal. However, the political uncertainty caused by the coup has hampered activities in these yards.
The coup has caused a number of significant concerns. The coup has caused extensive interruptions to Bangladesh’s industrial sectors, notably ship recycling yards. The introduction of martial law and curfews has hampered the mobility of goods and labour, causing delays and raising operational expenses.
The instability has created an unpredictable environment, making it difficult for multinational shipowners and dealers to enter into recycling contracts with Bangladeshi yards. Concerns about safety, regulatory changes, and the possibility of additional interruptions have prompted some to seek alternatives.
As a result of these issues, several shipowners and recycling companies are seeking other locations for ship recycling. This has resulted in a dramatic shift in the sector, with a renewed focus on ship recycling facilities in neighbouring India.
India, a long-time rival of Bangladesh in the ship recycling market, hopes to benefit from this shift. The interruptions in Bangladesh have increased demand at Indian shipbreaking yards, particularly those in Alang, Gujarat. Several reasons contribute to India’s rising status in this industry. Indian yards are expanding their operations to meet the rising number of ship recycling contracts. Investments in infrastructure and technology enable them to operate larger vessels and more complex recycling processes.
India has made progress in improving its regulatory framework for ship recycling, including improvements in environmental norms and worker safety. This has made Indian facilities more appealing to overseas clients looking for compliant and responsible recycling solutions. With Bangladesh’s industry in upheaval, India has established itself as a steady and dependable option. The capacity to provide competitive pricing and a strong regulatory framework has given Indian shipyards a competitive advantage.
The 2024 coup in Bangladesh has undoubtedly impacted the ship recycling business, resulting in severe operational issues and a rethinking of global supply lines. This circumstance has created opportunities for India’s ship recycling business to profit from the growing need for alternate recycling destinations. As Bangladesh’s political situation evolves, the shift in the ship recycling market may have long-term implications for the regional and global industry landscape.
Marex Media