India Bets Big on Domestic Shipping Fleet to Shield Energy Supply Chains from Geopolitical Shocks

India is making a decisive push to take control of its energy shipping infrastructure, placing maritime capacity at the heart of the country's long-term economic resilience strategy. As disruptions linked to the West Asia conflict continue to rattle global energy supply chains, state-run oil and shipping companies are rolling out an ambitious vessel acquisition programme. Tenders are being floated for the manufacturing of 28 vessels in FY27 alone, covering liquefied petroleum gas (LPG) tankers and medium range (MR) crude oil carriers, signalling a structural shift in how India plans to manage its energy logistics going forward.

For decades, India has depended heavily on foreign-flagged vessels to transport crude oil, LPG, liquefied natural gas (LNG), and refined petroleum products. That dependence has repeatedly come under the spotlight during periods of geopolitical instability, when access to third-party shipping becomes uncertain and costs spike. The government is now moving with a clear sense of urgency to close this vulnerability, treating fleet self-sufficiency not just as an operational goal but as a matter of national energy security.

The FY27 vessel programme sits within a far larger fleet expansion blueprint. Under this broader plan, India aims to invite bids for 62 vessels during the financial year ending March 2027, adding approximately 2.85 million gross tonnage (GT) of capacity. The estimated investment for this phase stands at around ₹51,383 crore. The initiative is also designed to address persistent gaps across several vessel segments, including container ships, green tugs, LPG carriers, crude tankers, and dredging vessels, where domestic fleet availability has consistently fallen short of demand.

Mukesh Mangal, Additional Secretary at the Ministry of Shipping, confirmed that the government has aggregated demand for 437 vessels by FY42. Within the current financial year, the target is to invite bids for 62 vessels, with tenders already floated for 34 vessels to date. This follows the government's announcement last year of a ₹70,000 crore package specifically designed to develop and strengthen India's broader shipping ecosystem.

Speaking on the intent behind the programme, Mangal explained: "Our effort is that these orders should go to domestic players. For example, if somebody has to buy a VLGC or a VLCC, right now these vessels are not being manufactured in India.

If these orders should not go to foreign companies, then we should have some kind of manufacturing facility within India. So, we are developing ship manufacturing within our country, and we have a target of floating tenders for 61–62 vessels within this year. Out of that, around 30–34 vessel tenders have been floated."

His remarks underscore a dual ambition: not only expanding India's operational fleet but simultaneously building out domestic shipbuilding capacity. The goal is to create an end-to-end marine manufacturing and logistics ecosystem that supports India's growing energy and trade volumes without depending on foreign yards or carriers.

To drive the procurement effort at scale, the Ministries of Shipping and Oil have together operationalised a joint venture (JV) between the Shipping Corporation of India (SCI) and various oil and gas public sector undertakings (PSUs). This collaborative structure is intended to enable bulk procurement and streamline decision-making across entities that have historically operated in silos.

Under the arrangement, the SCI-led JV will float tenders for 34 vessels, while ONGC will separately invite bids for 25 vessels. Together, these two channels account for approximately 2.80 million GT of capacity and a longer-term investment of ₹47,800 crore through FY42.

On the near-term acquisition front, ONGC has already initiated global tenders for 12 platform support vessels and anchor handling tug boats, including a right of first refusal (ROFR) provision for domestic players. Bids for four of these vessels have already been floated. Meanwhile, the SCI-PSU JV is progressing with tenders for 14 vessels, among them very large gas carriers (VLGCs) and MR tankers, with 10 tenders already issued. SCI, operating independently as part of its own business plan, has additionally floated tenders for two MR tankers.

The broader strategic objective, as articulated by officials involved in the programme, is threefold: reduce external dependence in energy logistics, strengthen supply assurance during periods of global disruption, and anchor a self-reliant marine logistics ecosystem capable of supporting India's rising energy appetite and expanding trade footprint. With the country's energy import bill among the largest in the world, securing the vessels that move that energy is increasingly being treated as a strategic priority on par with the energy procurement itself.