Dr Radhika Vakharia –
India’s maritime trade is vast, yet its presence in global shipping remains surprisingly small. The country has roughly 1,500 merchant vessels, accounting for less than 1.5 percent of the world’s total shipping tonnage. Despite being a major trading nation, India transports only about 7 to 8 percent of its own export import (EXIM) cargo on Indian flagged ships, leaving more than 90 percent of its trade dependent on foreign vessels.
A substantially larger domestic fleet would improve trade security by reducing dependence on foreign vessels for the movement of crucial imports such as oil, gas, coal, food, and fertilizers. Recent global disruptions, such as pandemics and geopolitical conflicts such as the current war in the highly energy-sensitive Iranian theatre, have highlighted the vulnerability of international supply chains and underscored the importance of maritime self-reliance for India. By investing in its merchant fleet, substantially & rapidly, India should strengthen its supply chain resilience, boost shipbuilding and maritime services, and increase its strategic influence in global trade.
India can expand its merchant navy fleet through a combination of financial reform, regulatory changes, and long-term maritime planning. The government can encourage fleet expansion by providing tax incentives, easier access to financing, and maritime development funds, since ships require significant capital investment. Introducing cargo support policies that reserve a portion of strategic imports and exports, such as oil, coal, and fertilizers, for Indian flagged vessels would also create stable demand for domestic shipping companies.
Strengthening the domestic shipbuilding and repair industry through subsidies, infrastructure development, and technology partnerships can reduce dependence on foreign shipyards. At the same time, simplifying ship registration procedures and improving the ease of doing business in the maritime sector would encourage more vessels to operate under the Indian flag. These efforts can be aligned with national initiatives such as the Sagarmala Programme and Maritime India Vision 2030 to create a stronger and more self-reliant maritime ecosystem.
Some of these initiatives have admittedly been taken up by the incumbent Government, but a lot remains to be done yet.
Building a strong merchant navy fleet is crucial for India both economically and strategically. At present, the country relies heavily on foreign shipping companies to transport the majority of its trade, resulting in billions of dollars in freight payments flowing out of the domestic economy every year. Expanding the number of Indian flagged vessels would also allow a larger share of this revenue to remain within the country, strengthening the maritime industry and creating more employment for Indians.
India should strive to be better prepared to take on the next big energy crisis. The writing is clearly on the wall: Time to fast-track our fleet growth!
Marex Media