Sources revealed that Indian Oil Corporation (IOC) will place an order for at least 10 MR tankers with a joint venture shipyard led by Shipping Corporation of India (SCI). IOC had previously considered placing the order with Chinese shipyards but has now turned to domestic shipbuilding under the Indian government’s initiative.
It is reported that IOC’s large-scale domestic shipbuilding plan has been in the works for a long time, but due to the lack of necessary shipbuilding technology in Indian shipyards, the plan has remained in the planning stage for many years.
The IOC once turned its attention to Chinese shipyards—where construction costs were lower and delivery times faster—prompting the Indian state-owned oil company to weigh the question: If acquiring foreign vessels could secure its energy supply lines, was it truly necessary to build ships domestically?
However, with the Modi government vigorously promoting a shipbuilding industry revitalization plan over the past two years, the Indian government has been strongly encouraging IOC and other oil companies to build ships at domestic shipyards to create jobs.
During this period, the IOC was proposed to consider forming a three-party joint venture with a foreign shipyard with tanker construction technology and a shipping company that operates such vessels to advance the shipbuilding plan. Sources said the IOC has decided to accept the proposal and will proceed with the relevant work.
According to the latest news, IOC will purchase at least 10 Aframax tankers with a deadweight tonnage of 80,000 to 120,000 tons through a joint venture with SCI and an Indian shipyard (possibly Cochin Shipyard). Other Indian oil companies may also follow this model.
Data indicates that to replace aging vessels currently leased primarily from global tanker owners, India’s state-owned oil companies will face a shortfall of over 100 crude oil carriers by 2040. Among the over $100 billion in freight costs incurred by Indian enterprises, more than 85% is spent on chartering foreign vessels.
To reduce reliance on foreign-built vessels, the Indian government has allocated approximately $10 billion in dedicated funding to construct 112 oil tankers at domestic shipyards by 2040. The first phase will involve building 79 vessels, including 30 MR tankers.
According to the plan, the Indian government aims to increase the proportion of domestically built tankers in its fleet from the current 5% to 7% by 2030, with a target of 69% by 2047. The tanker orders are placed by Indian state-owned oil companies, constructed by Indian shipyards, and operated by SCI.
Currently, major shipbuilders including HD Hyundai Heavy Industries, Samsung Heavy Industries, Mitsui O.S.K. Lines, and Nippon Yusen Kaisha have expressed interest in partnering with Indian shipyards such as Cochin Shipyard to carry out shipbuilding business in India.