India currently has a fleet problem, and the Centre intends to solve it. In 2025, India's merchant maritime fleet grew to around 1,600–1,650 vessels as per shipping ministry estimates, but still ranks only 16th globally, contributing just 1 per cent of global shipping tonnage.
According to the Observer Research Foundation-published paper authored by former Vice Admiral Puneet Kumar Bahl, India paid $75 billion, roughly equivalent to its entire annual defence budget, in sea freight to foreign-owned vessels back in 2023. This was then recorded as "transport services" in India's balance of payments and represents one of the least-discussed structural drains on the Indian economy, the report revealed.
In shipbuilding, the gap is even starker: By 2025, India held 0.06 per cent share of the global shipbuilding market and ranked around 20th, while China, South Korea, and Japan collectively dominated 85 per cent of global shipbuilding output, giving them the vessels, the leverage, and the freight revenue.
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Months ago, at THE WEEK Maritime Conclave, Madhu Nair, chairman and managing director of Cochin Shipyard Limited (CSL), had also flagged the issue. He then pointed out that our fleet of merchant ships was not enough to realise the vision of ‘Bharat at 2047, India at 100’.
“We are at just about 1,500 ships… we are much stronger than that. This situation cannot continue…” he said in September.
What was the government’s response?
On September 24, 2025, the Union Cabinet approved a comprehensive ₹69,725 crore package to revitalise India's shipbuilding and maritime ecosystem. Built around a four-pillar approach, the package covered:
-> strengthening domestic shipbuilding capacity
-> improving long-term financing
-> promoting greenfield and brownfield shipyard development, and
-> implementing legal, taxation and policy reforms
Its three biggest components were the Maritime Development Fund (MDF) at ₹25,000 crore for long-term sector financing, the Shipbuilding Financial Assistance Scheme (SBFAS) extended until March 2036 with a corpus of ₹24,736 crore, and the Shipbuilding Development Scheme (SbDS) at ₹19,989 crore, which targets an annual capacity of 4.5 million gross tonnage and will set up mega shipbuilding clusters. The package is expected to generate 30 lakh jobs and attract investments of ₹4.5 lakh crore.
Moreover, last year, the CSL MD assured that the government was taking steps to improve the merchant fleet situation.
What recent research pointed out was that while the ambition to enter the top ten shipbuilding nations by 2030 and the top five by 2047 is admirable, it is "challenging." The MDF itself still needs to mobilise close to half of its corpus from non-government sources, i.e., ports, PSUs, financial institutions, and private players. Delays in that mobilisation could undermine the fund's sustainability before it achieves critical mass.
But the intent itself is a great first step, for India cannot claim to be an emerging maritime superpower by paying another nation’s shipping lines to carry its trade.
