 "What does the global shipbuilding industry look like, and where is India?")
India’s nascent shipbuilding industry is poised for significant growth, attracting interest from major economies like Japan and South Korea. Union Minister of Ports, Shipping, and Waterways Sarbananda Sonowal revealed that these countries are exploring opportunities to invest in India’s shipbuilding sector. Potential collaborations could include direct investments, joint ventures, and technology sharing, reflecting the global confidence in India’s maritime potential.
The Ministry of Ports, Shipping, and Waterways aims to elevate India’s position from its current rank of 22nd in global shipbuilding to the top 10 by 2030, and the top five by 2047, as part of India’s Maritime India Vision 2030.
What is shipbuilding?
Shipbuilding refers to the construction, repair, and maintenance of vessels used for transportation, defense, and trade. It includes a range of ships, from small boats to large tankers and warships. Shipbuilding is carried out in specialised facilities called shipyards, which are equipped to handle large-scale projects and complex assembly processes.
India’s shipbuilding legacy
India’s coastal regions, particularly Gujarat, Bengal, and Odisha, were major hubs for shipbuilding in ancient times. They facilitated trade within Southeast Asia, with Africa and West Asia. Under the British colonial era, shipyards in India, such as Mazagon Dock in Mumbai (established in 1774), primarily constructed vessels for the British navy and merchant fleets.
After independence in 1947, India began rebuilding its shipbuilding industry. Public sector enterprises such as Mazagon Dock Limited (MDL) and Cochin Shipyard Limited (CSL) played a key role in constructing ships for the Indian Navy, Coast Guard, and commercial sectors.
Size of shipbuilding industry
The Shipbuilding Global Market Report 2024, estimates the global shipbuilding market size to grow from $207.15 billion in 2023 to $220.52 billion in 2024 at a compound annual growth rate (CAGR) of 6.5 per cent. This expansion is driven by economic growth in emerging markets, increased demand for cruise ships, growth in seaborne trade, and supportive government policies.
The report added that Asia-Pacific was the largest region in the global shipbuilding market in 2023, followed by Western Europe. Major countries involved include China, South Korea, Japan, India, Germany, USA, and others.
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India’s shipbuilding market value and growth
India’s shipbuilding industry is experiencing exponential growth. In 2022, it was valued at $90 million and is projected to reach $8,120 million by 2033, with an astounding CAGR of 60 per cent, according to Finextra Research. This growth is attributed to factors like government support, strategic location, labour cost advantages, and a focus on niche segments such as offshore support vessels and ferries.
The Ministry of Ports believes that if demand for India’s shipping market is “adequately targeted by Indian shipyards”, it may result in an opportunity to the extent of over $237 billion (Rs 20 trillion) by 2047.
Maritime India Vision 2030
Maritime India Vision 2030 is a strategic initiative launched by the Indian government to strengthen the country’s maritime sector over the next decade. It has set a bold target to elevate India’s global ranking in shipbuilding and ship repair from over 20th place to the top 10 and an ambitious goal has been set for the top-five position, as outlined in the Amrit Kaal Vision 2047.
As of February 2023, it estimated an investments to the tune of Rs 1,00,000 to 1,25,000 crore for capacity augmentation and development of world-class infrastructure at Indian ports.
Factors affecting growth of shipbuilding industry in India
Factors that are boosting shipbuilding industry in India, as reported by Finextra Research, are the following:
Government support: Policy initiatives such as the Scheme for Financial Assistance to Shipyards in India (SFAS) and a focus on enhancing indigenous shipbuilding capabilities are driving growth in the shipbuilding sector.
Strategic location: India's extensive coastline and proximity to major shipping routes provide a natural advantage for shipyards, helping reduce transportation costs and turnaround times.
Competitive labour costs: India offers a competitive edge with lower labour costs compared to other shipbuilding nations, making it an attractive option for international clients.
Focus on niche segments: Indian shipyards are specialising in categories like offshore support vessels, dredgers, and ferries, targeting specific market demands.
Countries leading in shipbuilding
Currently, India holds only 0.06 per cent of the global shipbuilding market, a stark contrast to the dominance of China, South Korea, and Japan, which collectively control 85 per cent of the industry. To compete, the Indian government has announced plans to build multiple shipbuilding clusters in collaboration with coastal states.
In 2023, China, South Korea, and Japan remained at the forefront of the shipbuilding market, thanks to their advanced infrastructure and expertise. European countries such as Italy, Germany, and Finland also made notable contributions, emphasizing specialised vessels and luxury cruise ships. These dynamics highlight the economic priorities and capabilities of these nations, as well as the global demand for a variety of ships.
Here are the top 20 countries listed in terms of passenger and cargo ship exports in 2023, according to data from The Observatory of Economic Complexity and the International Trade Centre (ITC).
China - $25 billion
South Korea - $16.7 billion
Japan - $9.6 billion
Italy - $5.1 billion
Germany - $3.9 billion
United Arab Emirates - $2.5 billion
Finland - $2.2 billion
France - $2.2 billion
Denmark - $1.9 billion
Poland - $1.6 billion
Cyprus - $1.3 billion
India - $1.12 billion
Belgium - $993 million
Turkey - $658 million
Ivory Coast - $629 million
Philippines - $462 million
Marshall Islands - $439 million
Indonesia - $274 million
Croatia - $271 million
Netherlands - $249 million
India’s top shipbuilding companies
India’s two key shipbuilders, MDL and CSL, have laid a strong foundation for the country’s maritime sector. MDL, known for its role in constructing warships for the Indian Navy and Coast Guard, has delivered over 800 vessels since its inception. CSL, the largest shipbuilder in India, specialises in constructing offshore vessels, oil tankers, and aircraft carriers, along with being the largest ship-repair facility in the country. Both companies play pivotal roles in advancing India's maritime ambitions.
Cochin Shipyard Limited
Additionally, the Adani Group has announced a major shipbuilding initiative at Mundra Port in Gujarat, with plans to invest Rs 45,000 crore. The initiative, launched in 2024, is part of a broader strategy to position India as a global shipbuilding hub. With global shipyards booked until 2028, Adani aims to capitalise on the rising demand for eco-friendly vessels, targeting a $62 billion market by 2047. The project aligns with India's vision of building over 50,000 vessels in the coming decades to meet global decarbonisation goals, further boosting India's shipbuilding industry.
Other major players include Hindustan Shipyard Limited (HSL) with an estimated 18 per cent market share in India. HSL reported $420 million in revenue in 2022. HSL builds a diverse range of vessels, including bulk carriers, tankers, and offshore supply vessels. Another is Larsen & Toubro (L&T) Shipbuilding, with a 15 per cent estimated market share in India. L&T focuses on high-tech defense vessels, offshore platforms, and warships. The company reported around $350 million in revenue in 2022.
HSL
Top shipbuilding companies in the world
According to a post by OUCO Industry, a manufacturing company, the largest shipbuilding companies in the world in 2024 are:
1. Hyundai Heavy Industries (HHI)
- Founded: 1972
- Headquarters: Ulsan, South Korea
- Headcount: 12,048
- 2023 revenue: KRW 11.974 trillion (Approximately $8.9 billion)
- Market share: 8.1 per cent
2. China State Shipbuilding Corporation (CSSC)
- Founded: 1999
- Headquarters: Beijing, China
- Headcount: 205,000
- 2023 revenue: RMB 74.839 billion (Approximately $10.291 billion)
- Market share: 20 per cent
3. Fincantieri S.p.A.
- Founded: 1959
- Headquarters: Trieste, Italy
- Headcount: 21,125
- 2023 revenue: 7.651 million euros (Approximately $8.278 billion)
4. Samsung Heavy Industries
- Founded: 1974
- Headquarters: Gyeonggi, South Korea
- Headcount: 9,886
- 2023 revenue: KRW 8.014 trillion (Approximately $5.773 billion)
- Market share: 8.5 per cent
5. Hanwha Ocean
- Founded: 1973
- Headquarters: Geoje-si, South Korea
- Headcount: 8,682
- 2023 revenue: KRW 7.408 trillion (Approximately $5.341 billion)
- Market share: 6.5 per cent
6. Imabari Shipbuilding
- Founded: 1901
- Headquarters: Ehime, Japan
- Headcount: 1,892
- 2022 revenue: JPY 376.4 billion (Approximately $2.49 billion)
7. JSC United Shipbuilding Corporation (USC)
- Founded: 2007
- Headquarters: Moscow, Russia
- Headcount: 21,125
- 2023 revenue: 400 billion rubles (Approximately $4.545 billion)
8. Sumitomo Heavy Industries
- Founded: 1934
- Headquarters: Tokyo, Japan
- Headcount: 24,050
- 2023 revenue: JPY 1081.5 billion (Approximately $7.14 billion)
9. Mitsubishi Heavy Industries (MHI)
- Founded: 1884
- Headquarters: Tokyo, Japan
- Headcount: 22,424
- 2023 revenue: JPY 4657.1 billion (Approximately $28.952 billion)
10. Mazagon Dock Limited
- Founded: 1934
- Headquarters: Mumbai, India
- Headcount: 4,290
- 2023 revenue: Rs 78,271.80 million (Approximately $937.61 million)
11. Cochin Shipyard Limited
- Founded: 1972
- Headquarters: Kochi, India
- Headcount: 1,883
- 2023 revenue: Rs 23,305 million (Approximately $279.17 million)
12. Harland & Wolff
- Founded: 1861
- Headquarters: Belfast, Northern Ireland
- Headcount: 1,000+
- 2023 revenue: £90 million (Approximately $1.136 billion)
13. K Shipbuilding
- Founded: 1967
- Headquarters: Changwon, South Korea
- Headcount: 8,682
- 2018 Revenue: KRW 3.497 trillion (Approximately $252.6 million)
14. Austal USA
- Founded: 1999
- Headquarters: Mobile, Alabama, USA
- Headcount: 4,000+
- 2023 revenue: $1.2 billion
15. Damen Shipyards Group
- Founded: 1927
- Headquarters: Gorinchem, Netherlands
- Headcount: 1,200+
- 2022 revenue: $2.6 billion