Against the backdrop of geopolitical turmoil, French shipping giant CMA CGM is accelerating its layout in India’s shipbuilding industry. India’s long-cherished vision of securing new shipbuilding projects from major international shipping companies will become a reality.
Cochin Shipyard announced that on October 14, it signed a letter of intent with a “prominent European shipowner” for the construction of six 1,700 TEU LNG dual-fuel feeder container vessels. The contract value is between US$225 million and US$300 million, translating to a cost of US$37.5 million to US$50 million per vessel. Cochin Shipyard described the order as “significant.” Delivery dates have not yet been announced.
Cochin Shipyard stated that a formal shipbuilding contract covering detailed technical and commercial terms will be signed in the coming months, marking the yard’s first international order for ocean-going container vessels. Previously in 2023, Cochin Shipyard entered the container vessel construction market for the first time through a shipbuilding contract with Dutch shipowner Samskip.
Sources familiar with the transaction revealed that the new vessel design for this series is expected to be based on HD Hyundai Heavy Industries’ existing platform. In July this year, Cochin Shipyard and HD Hyundai established a long-term partnership in shipbuilding, under which Cochin Shipyard will receive support from the South Korean shipbuilder in areas including design and procurement, production efficiency enhancement and technical collaboration.
Shortly after the order was announced, media reports revealed that the “prominent European shipowner” was CMA CGM. Half a year ago, CMA CGM first announced plans to order container vessels from India. This letter of intent marks the first time a major global liner operator has placed an order with an Indian shipyard, signifying a breakthrough for India’s shipbuilding industry.
In February of this year, CMA CGM Chairman Rodolphe Saadé presented the project to Indian Prime Minister Narendra Modi and French President Emmanuel Macron. In April, CMA CGM’s container vessel, the CMA CGM Vitoria, was transferred to Indian flags and classified by the Indian Register of Shipping, a first for a major international shipping company. Three more container vessels have since completed this transfer. India’s Economic Times reported that the six new vessels may also fly the Indian flag.
Cochin Shipyard, India’s largest shipbuilding enterprise, was established in 1972. It is said to possess the capability to design, construct, and maintain various types of vessels ranging from merchant ships to aircraft carriers. Currently, it primarily undertakes government projects, including “building India’s first domestic aircraft carrier.”
Analysts note that CMA CGM’s first order in India will lay the foundation for Maersk, MSC, and other shipowners to build vessels in India. Additionally, the mutual imposition of “port fees” between China and the US has taken effect, which will significantly impact the global shipbuilding and shipping market. To mitigate geopolitical risks, international shipowners may increasingly place orders with Indian shipyards.
Currently, India ranks 16th globally in shipbuilding, accounting for approximately 1% of the global shipbuilding market share. India aims to become one of the top ten shipbuilding nations by 2030 and enter the top five by 2047. Recently, India has introduced a series of fiscal plans to support shipbuilding enterprises and plans to integrate existing shipyards with newly constructed ones into a nationwide shipbuilding cluster.