Modi Govt Unveils $10 Billion Plan to Acquire 112 ‘Made-in-India’ Oil Tankers to Boost Energy Security & Maritime Self-Reliance

In a landmark move to enhance India’s energy security and maritime independence, the Modi government has announced a ₹83,500 crore ($10 billion) plan to acquire 112 oil tankers built entirely in Indian shipyards by 2040. The initiative aims to localize crude oil transport infrastructure, reduce reliance on foreign-owned vessels, and revitalize the domestic shipbuilding industry.

This strategic undertaking is a critical step toward realizing Prime Minister Narendra Modi’s “Aatmanirbhar Bharat” (Self-Reliant India) vision and aligns with India's long-term energy roadmap.

India plans to spend $10 billion on 112 crude oil tankers by 2040 to boost energy security and strengthen its domestic shipbuilding industry | India News Network

Bold Response to India’s Crude Oil Dependency

India, the world’s third-largest crude oil importer, depends on imports to meet over 85% of its domestic oil demand. However, only around 5% of the ships used for transporting this oil are Indian-owned or Indian-built. The rest are leased from foreign companies, resulting in an annual outflow of approximately $75 billion in freight and insurance.

This dependency leaves India vulnerable to disruptions in global shipping and exposes it to high freight costs, sanctions, and route restrictions. The new plan seeks to reverse this by ramping up domestic capacity and ownership in the maritime oil transport sector.

Indigenous Construction: A Boost to Indian Shipyards

A defining feature of the project is the emphasis on 100% domestic construction:

• All 112 crude oil tankers will be built in Indian shipyards.

• International collaborations for technical assistance are allowed, but only if construction happens within India.

• Prominent public and private shipbuilders — including Cochin Shipyard, Hindustan Shipyard, Garden Reach Shipbuilders, and L&T — are expected to participate.This is expected to rejuvenate the Indian shipbuilding sector, generate thousands of skilled jobs, and attract much-needed capital investment. It will also help develop India as a global hub for commercial and defense ship manufacturing.

Phased Procurement Timeline

The acquisition will follow a structured, phased timeline:

• Phase 1 will involve the procurement of 79 tankers, including 30 medium-range vessels.

• The first order of 10 ships is expected to be placed by the end of May 2025.

• The full fleet of 112 tankers is planned to be inducted by 2040.Each Very Large Crude Carrier (VLCC) — the largest type of tanker — costs about $90 million. Spread over 15 years, this initiative ensures steady demand for shipyards and long-term supply-chain investments.

Strategic & Economic Payoffs

The long-term economic and strategic benefits of the initiative are extensive:

• Reduces foreign exchange outflow by cutting down on leasing costs.

• Creates over 20,000 jobs across shipbuilding, engineering, logistics, and ancillary sectors.

• Builds national capacity to respond during international shipping crises or sanctions.

• Offers predictable freight costs and self-managed energy logistics.In addition, there are plans to form a government-backed oil tanker company to manage the new fleet, possibly modeled on the lines of ONGC or GAIL. This company could eventually lease Indian tankers to friendly countries in Asia and Africa, adding a diplomatic and economic dimension to the initiative.

Part of a Larger Energy Vision

This move is part of a much broader roadmap to strengthen India’s energy infrastructure. Key associated goals include:

• Expanding India’s crude refining capacity from 250 MTPA (million tonnes per annum) to 450 MTPA by 2030.

• Building strategic petroleum reserves to ensure at least 90 days of emergency supply.

• Advancing toward cleaner fuels, including biofuels, green hydrogen, and electric mobility — while securing fossil fuel supply chains in the interim.

Reactions from Industry & Experts

Industry stakeholders have welcomed the plan:

• “This is a transformative moment for Indian shipping. The sector has been waiting for a revival, and this is the catalyst,” said Capt. Ashok Sharma, former SCI Director.

• “Energy security and logistics autonomy are two sides of the same coin. India is now addressing both with foresight,” remarked Dr. Narayan Iyer, energy policy expert.

Conclusion

India’s $10 billion oil tanker acquisition plan is not merely a procurement strategy — it is a statement of intent. By choosing to build domestically, the Modi government is betting on Indian industry, safeguarding strategic interests, and laying the foundation for a truly self-reliant energy future.

At a time when geopolitical tensions and global supply chains are increasingly fragile, this move reinforces India’s ability to chart its own course — economically, strategically, and industrially. As the country moves toward its 100th year of independence in 2047, this initiative stands as a beacon of confidence in Indian capabilities and commitment to sovereignty.

(Sources: OpIndia, India News Network, Times of India)