Investor interest in Indian shipyards hinges on faster execution: Drewry

Foreign investors are evaluating opportunities in Indian shipyards, but the country must expand capacity and strengthen the supply chain quickly to emerge as a global shipbuilding hub, executives at Drewry Maritime Advisors said in a webinar.

India has only a three-to-four-year window to translate policy into projects before it risks losing momentum, they warned, noting that there’s limited domestic capacity and the industry relies on imports for up to 70% of components.

Addressing queries on India’s maritime sector, Shailesh Garg, general manager for India at Drewry Maritime Advisors, said the country’s long-term ambitions would be judged by how quickly projects move from announcements to execution. While projects are underway, the pace of execution has reduced over the past few years, he added.


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“If we miss this bus and this window of three-four years, then probably it will be hard for us to really catch up with this target,” Jayendu Krishna, who heads the London-headquartered maritime research and consulting firm, said in response to a query by ET.

Execution over the next few years would be the key milestone for investors to monitor, he added.

India, however, starts from a small base. According to Drewry, the country accounts for less than 0.5% of the global shipbuilding order book and ranks 11th globally, well behind China, South Korea and Japan.

A major constraint remains the domestic manufacturing ecosystem.

Developing a domestic ecosystem of equipment manufacturers would be critical to reducing import dependence and supporting large-scale shipbuilding, Garg said, noting that almost 60% to 70% of components used in shipbuilding are currently being imported.

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Capacity expansion will also take time. Drewry said the first phase of additional ship repair capacity from brownfield and greenfield projects is expected over the next three to five years, while shipbuilding capacity is likely to take five to eight years to develop. The scale of subsequent expansion will depend on how successfully the initial projects are executed.

The consultancy expects dry bulk carriers, general cargo vessels and container ships to generate the strongest demand for Indian shipyards over the next three years. India’s state-run oil and gas companies have been mandated to place orders for more than 200 vessels with domestic shipyards, providing an initial demand pipeline for local yards.

Among states competing to attract new investment, Drewry said Gujarat is marginally ahead, although Andhra Pradesh, Tamil Nadu and Odisha are also drawing strong interest from investors exploring new shipbuilding and ship repair facilities.

According to Drewry, the next few years will determine whether investor interest translates into projects on the ground. Beyond announcing incentives and targets, India will need to build yard capacity, deepen its domestic supplier base and execute projects on schedule if it wants to establish itself as a competitive shipbuilding destination.

Drewry advises shipowners, investors, ports, financial institutions and governments on shipping, ports and logistics projects globally.