In a bold step to enhance India’s maritime infrastructure and energy security, the government has announced an ambitious investment of Rs. 85,600 crore (approximately US$ 10 billion) aimed at building a homegrown oil tanker fleet by the year 2040. The project, which involves the acquisition of 112 crude oil tankers, reflects the country's growing emphasis on reducing dependency on foreign-owned shipping fleets and strengthening domestic capabilities in critical infrastructure sectors.

The initiative will be jointly executed by the Ministry of Shipping and the Ministry of Petroleum, with a strategic goal of reversing the current trend where India's state-owned oil companies mostly rely on ageing, chartered vessels operated by global shipping players. The proposed fleet expansion will not only help secure reliable crude transport but also serve as a demand-side stimulus for India’s emerging shipbuilding industry.

The first phase of the plan includes the procurement of 79 vessels, among which 30 will be medium-range (MR) tankers, crucial for regional oil transport routes. Significantly, purchase orders for an initial batch of 10 ships are expected to be issued within this month, kick-starting the manufacturing process. To ensure that the benefits of this investment reach Indian industries, only tankers constructed in India—including those built through foreign collaboration—will be considered eligible under the scheme.

India’s crude oil refining capacity is on a rapid growth trajectory, expected to increase from 250 million tonnes to 450 million tonnes by 2030, driven by both domestic consumption and global export demand. With this expansion, the need for a robust and self-reliant shipping fleet has become urgent. The government aims to raise the share of locally built oil tankers from the current 5% to 7% by 2030, with a long-term vision of reaching 69% by 2047, aligning with India's mission to become a developed economy by its 100th year of independence.

To support this mission, the government has already allocated a Rs. 25,000 crore (US$ 2.92 billion) maritime fund to strengthen port infrastructure and incentivise local shipbuilding. This fund is part of a broader strategy to transform India into a shipbuilding hub, reducing its heavy reliance on Chinese maritime services and creating a competitive domestic market for global partnerships.

India is actively engaging with leading global shipbuilders such as HD Hyundai Heavy Industries, Samsung Heavy Industries, and Nippon Yusen KK (NYK Line). These collaborations are designed to bring advanced shipbuilding technologies to India while ensuring that all construction happens domestically, contributing to local employment and industrial growth. Make in India will be a central theme, supported by financial incentives and policy frameworks encouraging both public and private sector participation.

Beyond crude oil, the government is also looking to expand shipping capacities for coal, fertilizer, and steel, which are key inputs for the country’s energy and infrastructure sectors. This broader strategy fits into the vision of making India self-reliant (Atmanirbhar Bharat) in critical logistic domains.

Currently, India depends on foreign-flagged vessels for the majority of its oil transport needs, exposing the nation to geopolitical risks, freight volatility, and supply chain disruptions. With the development of a domestic fleet, India can not only control freight costs but also respond more swiftly to international supply chain crises, such as those witnessed during the COVID-19 pandemic and the Russia-Ukraine war.

From an economic standpoint, this investment is expected to generate thousands of direct and indirect jobs, especially in coastal regions with shipbuilding potential, such as Gujarat, Tamil Nadu, Maharashtra, and Andhra Pradesh. Moreover, the initiative is likely to attract foreign direct investment (FDI) in the maritime sector, create technology transfer opportunities, and improve India’s ranking on the global logistics performance index.

Environmental sustainability is also being factored into this long-term plan. The new fleet will be designed to meet the latest international emission standards, and preference will be given to dual-fuel or LNG-powered tankers to align with India’s net-zero goals by 2070. This could give India a unique positioning in the global shipping sector as a provider of green shipping solutions.

Experts believe that this move will also boost the competitiveness of Indian refiners by reducing dependence on foreign shipping charters, which often charge premium freight. The cost savings could make Indian refineries more attractive in the international export market, especially in Africa and Southeast Asia.

The regulatory framework for executing this investment is also being reformed. A new public-private partnership (PPP) model is expected to emerge where Indian shipping firms, public sector units, and global builders co-develop capabilities in India. The Director General of Shipping and the Maritime India Vision 2030 policy documents are being updated to incorporate these new goals and ensure fast-track approvals and streamlined processes.

In conclusion, India’s plan to invest Rs. 85,600 crore by 2040 to create a homegrown oil tanker fleet is a significant leap toward strategic energy security, domestic capability building, and economic self-reliance. With rising refining capacity, a growing maritime trade profile, and the need to insulate from global disruptions, this initiative is timely and visionary.

The focus on local shipbuilding—with strategic collaborations and policy support—will not only reduce costs and improve availability but also empower India’s maritime ecosystem for the long term. As the country prepares to scale from a regional to global logistics powerhouse, the oil tanker investment plan serves as a cornerstone for broader maritime infrastructure development, helping achieve India’s aspiration of being a developed economy by 2047.

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