Government Plans to Expand Merchant Fleet by 100 Vessels Over Next Five Years

The government plans to add 100 new vessels to India’s merchant fleet over the next five years as part of efforts to reduce the country’s annual freight payments of around 75 billion US dollars to foreign shipping lines and strengthen domestic shipping capacity. Shipping Minister Sarbananda Sonowal announced the initiative on Tuesday following the Sagar Samvad event organised by the National Shipping Board.

India currently operates a merchant fleet of approximately 1,600 seagoing ships. Expanding this capacity is intended to lessen dependence on foreign vessels for the transport of critical cargo such as crude oil, gas, coal and urea, while retaining a larger share of freight expenditure within the domestic economy.

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Roadmap for Fleet Expansion

The National Shipping Board has proposed a five-point roadmap to support the addition of the new vessels. The plan includes fiscal reforms, assured cargo support, access to competitive financing, regulatory streamlining and improved ease of doing business. Sonowal described these measures as the architecture of a nation choosing to own its own trade, noting that they would enable Indian shipowners to participate more effectively in the country’s expanding maritime economy.

The initiative aligns with the Maritime India Vision 2030 and the Maritime Amrit Kaal Vision 2047, which aim to position India among the world’s top five ship-owning nations by 2047 and significantly expand overall port capacity. India’s shipping fleet capacity by gross tonnage recently crossed 14.2 million for the first time, with further additions expected in the coming years.

Building a Skilled Maritime Workforce

Sonowal emphasised that the maritime sector has the potential to become a major source of employment for India’s young workforce and to establish the country as a leading global supplier of skilled seafarers. India’s seafarer workforce has already grown substantially, placing the nation among the top three global suppliers.

Quality training capacity is being expanded through industry-led skilling programmes, wider employment pathways, efforts to address gender disparity, and specialised training for emerging segments such as cruise shipping and advanced shipbuilding. A skilled and future-ready workforce is viewed as essential to achieving the goals of the Maritime India Vision 2030 and strengthening domestic shipbuilding capabilities under the longer-term vision for 2047.

Union Minister Mansukh Mandaviya, speaking at the event, called for coordinated efforts among the government, industry, trade bodies and training institutions to expand training capacity, strengthen market outreach for Indian seafarers and develop specialised talent for new segments of the maritime economy.

Progress in Domestic Manufacturing and Cost Challenges

Sonowal also highlighted the success of the Container Manufacturing Assistance Scheme, which has an outlay of Rs 10,000 crore. Global shipping major Maersk has begun ordering containers manufactured in India under the scheme, reflecting growing confidence in domestic production capabilities.

Despite these advances, operating vessels under the Indian flag remains 16 to 20 per cent more expensive than flying a foreign flag. The higher costs arise from taxes on ship imports and maintenance services, tax deductions on seafarers’ wages, tax on freight, and higher domestic capital costs that foreign competitors do not face. Indian shipowners are still expected to match foreign freight rates under the Right of First Refusal mechanism to secure cargo.

The MGMM Outlook 

The government’s plan to add 100 vessels to India’s merchant fleet over the next five years marks an important step towards strengthening the country’s maritime capabilities and reducing dependence on foreign shipping lines. With India currently spending around $75 billion annually on freight payments to foreign carriers, expanding the domestic fleet could help retain a greater share of this expenditure within the Indian economy. The initiative also complements the broader Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047, which seek to make India a leading global maritime power.

The focus on fleet expansion is being accompanied by measures to improve financing, taxation, regulation, assured cargo availability and ease of doing business for Indian shipowners. At the same time, investments in maritime training and specialised skills can create greater employment opportunities for India’s young workforce and strengthen the country’s position as a major supplier of skilled seafarers. Progress in domestic container manufacturing under the ₹10,000-crore Container Manufacturing Assistance Scheme further indicates the growing emphasis on developing an integrated maritime ecosystem within the country. Addressing the higher operating costs faced by Indian-flagged vessels will remain important, but the combination of fleet expansion, domestic manufacturing, skilled manpower and policy reforms can provide India with greater control over its trade routes and strengthen its long-term economic and strategic resilience.

(Sources: Moneycontrol, LiveMint, DD News)