India's 100-ship fleet expansion plan to reduce $75 billion foreign freight dependency

Livemint - Economy · 29 Aug 2026 · 2 min read
Prelims · Economy Mains · GS3 Economy High relevance

India plans to add 100 vessels to its merchant fleet over five years to reduce its $75 billion annual foreign freight bill and enhance maritime competitiveness, aligning with Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047.

Key points

National Shipping Board (NSB) proposed a five-pillar roadmap at 'Sagar Samvad' to make Indian-flagged shipping competitive, targeting India's inclusion among the top five ship-owning nations by 2047.

$75 billion annual freight bill is paid to foreign shipping lines for transporting critical cargo like crude oil, natural gas, coal, and urea, highlighting strategic and economic vulnerabilities.

Right of First Refusal (RoFR) framework currently disadvantages Indian shipping companies, requiring them to match foreign freight rates despite a 16-20% cost disadvantage due to taxes and financing constraints.

Five proposed measures include fiscal reforms, assured cargo support, competitive financing, regulatory streamlining, and ease of doing business to bridge the competitiveness gap.

Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047 aim to quadruple port capacity to 10,000 million tonnes annually by 2047, complementing the fleet expansion.

[GS3-Economy] The plan aligns with India's self-reliance goals, reducing exposure to global shipping disruptions and retaining freight expenditure within the domestic economy.

Container Manufacturing Assistance Scheme (₹10,000 crore) supports domestic maritime ecosystem development, with Maersk already ordering Indian-made containers.

14.2 million GT fleet capacity was achieved in March 2026, with 92 vessels added in FY26, and 62 more planned for FY27 to add 2.85 million GT capacity.

[GS2-Governance] The NSB's reforms address systemic issues like taxation and financing, critical for improving governance in the maritime sector.

Way Forward: India should implement tax rationalization for ship imports and maintenance, establish a dedicated maritime financing institution, and enhance bilateral cargo agreements to ensure assured cargo for domestic operators.

Key terms

National Shipping Board (NSB)

A statutory body under the Merchant Shipping Act, 1958, advising the government on shipping policy and regulations. It plays a pivotal role in shaping India's maritime competitiveness and strategic fleet expansion.

Right of First Refusal (RoFR)

A policy framework mandating Indian shipping companies to match foreign freight rates to secure cargo. It aims to prioritize domestic operators but currently exacerbates cost disadvantages due to higher taxes and financing costs.

Maritime India Vision 2030

A government initiative to modernize India's maritime infrastructure, enhance port capacity, and boost shipping competitiveness. It aligns with broader economic goals like reducing logistics costs and improving trade efficiency.

Gross Tonnage (GT)

A measure of a ship's total internal volume, used to assess fleet capacity. India's GT crossed 14.2 million in 2026, reflecting growth in maritime infrastructure and strategic tonnage expansion.