Recently, Karachi Shipyard & Engineering (KS&EW)—Pakistan’s only domestic shipyard—officially began assembly work on an 1,100-TEU container ship being built for the Pakistan National Shipping Corporation (PNSC). This marks Pakistan’s first resumption of large commercial shipbuilding in more than 40 years.
The project was first announced in 2024 and the contract was signed in February of that year, but it was temporarily suspended due to fiscal pressures within Pakistan. Subsequently, the Pakistani government stepped in to coordinate efforts to revive the project, and steel plate cutting began in January 2026.
According to reports, Pakistan’s commercial shipbuilding industry has been in a prolonged state of stagnation since the 1980s. KS&EW primarily builds frigates, light frigates, military oil tankers, and logistics support vessels for the Pakistani Navy. The shipyard has the capacity to build vessels of up to 26,000 deadweight tons and can construct a variety of ship types, including bulk carriers, oil tankers, dredgers, ferries, fishing vessels, and tugs.
To develop its marine economy, the Pakistani government established a special task force in 2024 to explore avenues for growth.
To address the issues of high shipbuilding costs and weak industry competitiveness—and considering that neighboring countries such as India provide subsidies of up to 30 percent to their shipbuilding industries—the Pakistani government has implemented fiscal and tax reforms, eliminating the 22 percent sales tax on ship purchases and raw materials used in shipbuilding. The government hopes this will encourage domestic shipowners to have their vessels built in Pakistan.
While reviving its civilian shipbuilding industry, Pakistan is simultaneously moving forward with port modernization and upgrades: reducing customs clearance times, deploying smart container inspection equipment, and implementing 24-hour port operations.
In addition, Pakistan plans to revitalize its long-stagnant shipbreaking industry. Pakistan has already signed the Hong Kong Convention, and five shipbreaking yards have completed the necessary upgrades to meet compliance requirements.
Pakistan has stated that the recovery of its commercial shipbuilding industry will boost the country’s economic development, save significant foreign exchange expenditures, and is expected to lead to ship exports in the future.