Shipping Industry in India: Issues, Policies & Future Scope

The shipping industry in India plays a significant role in facilitating the movement of goods in and out of the country. About 95% of India’s trade by volume and 68% by value happens through the sea, as per official data.

Over 800 million tonnes of cargo were handled by the major ports in 2023–2024, and this figure continues to rise annually. Many ports are now running below capacity. So there is still an opportunity to increase the system’s efficiency. Let’s examine the main problems that exporters and sellers encounter, as well as the future of the sector.

Evolution of Indian Sea Trade

Today, sea trade is a major part of India’s economy. Most of the country’s imports and exports still move through its ports. However, the history of Indian sea trade can be traced back to the Indus Valley Civilisation, where traders were already using the sea to send goods to places like Mesopotamia. The dockyard at Lothal still stands as proof that they knew how to build ports and handle the tides.

Over the centuries, sea trade continued to expand. Stories in the Vedas, Jataka Tales, and Tamil Sangam poems describe Indian ships sailing to distant lands. Indian traders established strong connections with Southeast Asia, East Africa, and the Middle East, utilising sea routes that evolved into bustling trade highways.

Later, during the Mauryan period, sea trade became even more organised. The empire built a navy not only for defence, but also to protect trade. Indian goods, like spices, fabrics, and precious stones, were in demand across the world.

When the Portuguese came in the 15th century, everything changed. Other European powers, including the Dutch, French, and British, soon followed. They didn’t just trade; they established ports and gradually gained control of Indian waterways.

Where does Indian Shipping Struggle on the Global Stage?

Indian shipping has made progress, but still faces some tough roadblocks that hold it back on the world stage. Even when Indian exporters match global product quality, shipping those products on time and at a competitive price is often challenging.

●  Many shipyards in India continue to employ outdated techniques. As a result, shipbuilding is more expensive and slower than in other nations.

●  The majority of essential ship components, such as engines and navigational aids, are imported. Delays and increased expenses result from this.

●  High interest rates make shipbuilding loans costly. This makes it difficult for businesses to expand.

●  There are not enough ship repair yards in India. Even minor ship repairs can require them to go overseas, which can increase both time and expense.

●  Ports are crowded. Containers wait for days. Many ports aren’t deep enough for large ships, so goods go through foreign hubs like Colombo.

●  Almost 90-95% of all exports are handled by foreign shipping companies. Indian firms carry only a small share.

●  India makes very few containers. Most are imported from China. 

●  Freight costs have jumped, from INR 2.1 to INR 2.3 lakh per 40-foot container in just a few years.

●  Even good projects face delays due to slow approvals and too much paperwork.

●  India doesn’t make enough marine-grade steel or high-tech ship parts. 

Key Announcements from Budget 2025 for the Maritime Sector

India’s shipping industry just got a big push in Budget 2025. These steps are meant to make sea trade faster, cheaper, and more reliable for Indian businesses.

●  The government has set up an INR 25,000 crore Maritime Development Fund. This fund will help build more Indian ships and enhance the country’s shipping infrastructure. The idea is to reduce our dependence on foreign shipping lines and increase India’s share in global cargo movement.

●  Indian shipbuilders will also benefit from a new plan called SBFAP 2.0. It’s a financial support policy with a budget of INR 18,090 crores. The aim is to help local shipyards take more orders by covering part of their costs.

●  There’s also a plan to build large shipbuilding clusters. These will come with ready infrastructure like breakwaters, roads, utilities, and a 10-year land rent holiday. It’s meant to cut startup costs and attract private investment in shipbuilding.

●  To make ports more efficient, INR 6,100 crore will go into modernising equipment and automating operations. This means faster cargo movement and less time wasted at ports, something exporters often struggle with.

●  A new credit note scheme has been launched for shipbreaking. If an old ship is scrapped at an Indian yard, the company gets a 40% rebate when buying a new, Indian-made ship.

●  To make it cheaper to build and fix ships, customs duty on inputs has been removed for 10 years. This is expected to significantly lower production costs.

●  Another big move is that large ships are now considered infrastructure assets. That means better access to long-term loans and tax benefits for companies that invest in them.

●  The budget also focuses on training and research. Approximately INR 1,200 crore is being invested in centers for ship design and testing. Plus, INR 1,040 crore will support private training institutes.

●  For innovation in ship technology, INR 610 crore has been set aside for research and development. The goal is to develop more effective ship designs and more efficient engines, while promoting clean and green shipping practices.

●  The tonnage tax scheme, which was earlier meant for big ocean ships, will now cover inland vessels too. This provides tax benefits based on the size of the vessel, rather than the profit, making it more attractive to invest in smaller cargo boats for rivers.

●  The PM Gati Shakti portal is now open to private players. This will facilitate smarter planning of cargo routes that utilise multiple modes, including road, rail, and sea, all on a single platform.

What Can Transform India’s Maritime Sector?

India has a long coastline, and ships sail in and out every day. But even with that, the full strength of India’s maritime sector hasn’t been used yet. A few practical steps can make a difference.

●  Ports must move faster: Goods often sit too long at ports, causing delays and higher costs. To expedite shipping movement, the Sagarmala initiative requires updating ports and improving their accessibility to rivers, highways, and railroads.

●  Build ships in India: Most ships are bought from other countries. A new policy is helping Indian shipyards build more vessels locally, saving money and creating jobs.

●  Use digital systems: Platforms like e-Samudra cut down paperwork and make cargo handling faster and simpler.

●  Keep sea routes safe: More trade needs better security. India must invest in coastal safety systems and patrol ships.

●  Train skilled workers: Trained workers and staff can add to a strong port, shipping, and logistics workforce.

How India Compares with Global Maritime Leaders

India has several strengths in the maritime industry, but when compared to global leaders, there are still gaps to address. So let us compare it with the worldwide marine leaders to get a better idea:

1. Shipbuilding Capacity: China, Japan, and South Korea build many more ships than India. One reason is that Indian shipyards rely on imported parts, such as marine steel and engines, which makes shipbuilding slower and more costly.
2. Port Efficiency: Mundra and JNPT have made progress, but they still handle significantly less cargo than leading ports like Shanghai. Additionally, most Indian ports still rely on manual labour, whereas ports in Singapore utilise machines and advanced systems to expedite operations.
3. Shipping Costs: Bringing a ship to an Indian port is costly. A visit to JNPT can cost about USD 100,000. The same ship would pay just USD 12,000–USD 17,000 in Singapore or Port Klang, making Indian ports less attractive.
4. Technology: India has started using PCS and e-Bill of Lading. But in addition to digital paperwork, global leaders also use AI and automated cranes at ports like Rotterdam to handle goods more quickly and efficiently.
5. Trans-shipment Dependence: Ports like Singapore and Colombo handle almost 25% of India’s trade. This adds time and cost. Singapore and other nations handle most of their shipping directly, saving time and money.
6. Green Shipping: Indian ports, such as JNPT, utilise solar power and electric machines. However, ports like Rotterdam and Singapore are ahead; they reward cleaner ships and adhere to stricter green standards.

How Other Countries Transformed Their Shipping Industries

Many countries improved their shipping industries. Here are some real examples of how they have achieved it.

1. Singapore

Singapore made its ports fast and smart. At the Tuas port, machines load and unload containers, resulting in fewer delays and lower costs. Ships that pollute less get discounts. It’s clean, digital, and very efficient.

2. China

China built strong shipyards and backed them with steady government support. It’s now the world’s top shipbuilder. Ports like Shanghai run on smart systems. They handle more containers than any Indian port today. Work is fast, organised, and mostly digital.

3.  Netherlands

The port of Rotterdam is fast, green, and clean. Ships use shore power to avoid burning fuel while docked. Systems guide cargo smoothly from ship to land. It’s one of the most efficient ports in Europe.

What Should India Prioritise for Long-Term Shipping Growth?

India can grow its shipping sector by fixing a few key areas. These changes can lower costs, save time, and make trade easier for everyone, including small sellers.

●  Build Ships in India: Most ships are still imported from foreign nations, which can be costly. To minimise costs, India could construct its own ships.

●  Improve Ports: Upgrading ports means faster cargo handling. Ports should also connect better to roads, railways, and rivers.

●  Go Digital: The use of digital solutions, such as e-documents, logs, etc., can help speed up the entire process.

● Train Skilled Workers: Modern shipping requires a trained staff. More training centers are needed for ports, logistics, and shipbuilding jobs.

●  Support Green Shipping: Ports should employ renewable energy. This also includes properly recycling old ships, which could reduce waste and create profit.

Digital Transformation in Indian Shipping: Role of CargoX

Sending large shipments to other countries isn’t always easy. There are several key tasks to keep track of, including documentation, pickups, and ensuring that everything arrives on schedule. CargoX makes this easier to handle. We let you send bulk shipments, with no weight limits, to over 200 countries and territories.

You get fast quotes, pickup within 24 hours, and simple digital tools to handle booking, tracking, and documents, all in one place. With 90% on-time delivery and customisable plans, it gives you control of your shipping process.

Conclusion

India’s maritime sector is growing. However, issues such as port delays or confusing shipping procedures can make operations costly and time-consuming. India’s vision is to address these problems by building better ports, improving roads and rail infrastructure near ports, and promoting cleaner shipping. If these policies and initiatives go as planned, you can send products to more places without hassle. It’s all about making shipping smoother so your business can grow.