The Indian government appears to have dropped its plan to privatise Shipping Corporation of India Ltd (SCI) and is preparing instead to strengthen the national carrier with fresh capital and fleet expansion. Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal confirmed in an interview with The Economic Times that the government plans to infuse capital into SCI to boost its fleet, a move seen as the clearest sign that the privatisation process has been abandoned.
Following this change in stance, SCI’s management, led by Chairman and Managing Director Capt B.K. Tyagi, has urged the government to reverse the earlier demerger of core and non-core assets. The demerger, done to facilitate privatisation, saw SCI’s prime real estate assets—including the Shipping House headquarters at Nariman Point, the Maritime Training Institute at Powai and staff quarters in Mumbai and Kolkata—transferred to a separate company, Shipping Corporation of India Land and Assets Ltd (SCILAL). The core shipping company had also transferred ₹1,000 crore to the non-core entity. SCI now argues that about ₹4,000 crore worth of assets are locked in SCILAL and wants the entities to be merged again.
The privatisation process, initiated in December 2020 to sell the government’s 63.75% stake to a strategic buyer, has stalled. A government source said, “In a way, the privatisation process has been abandoned.” Evidence of this shift is SCI’s recent purchase of two second-hand Very Large Gas Carriers (VLGCs) for $127 million, its first ship acquisition in eight years. The unofficial freeze on buying ships during the privatisation process has clearly been lifted. SCI last expanded its fleet in FY17 with four second-hand vessels.
Sources say the government’s focus is now on strengthening the national carrier, supported by signals from the Prime Minister’s Office. In times of crisis, atmanirbharta (self-reliance) in shipping is seen as vital for India’s energy security. Joint ventures with oil marketing and steel PSUs are being formed to acquire ships from domestic shipyards. The Cabinet has also approved a ₹69,725 crore package to boost shipping and shipbuilding, reflecting this new strategic direction.
Geopolitical developments have further influenced the rethink. With the US reportedly urging European nations to sanction India for buying Russian oil, officials believe India could face an energy crisis if it does not have its own independent carrier. Private shipowners cannot be compelled in such situations, making a strong state-owned carrier essential.
Industry sources confirm that SCI is now pushing to merge the core and non-core entities and the government must take a decision. With capital infusion on the way, new ship acquisitions underway and strategic importance rising, all signs point to the privatisation of SCI being quietly shelved in favour of building a stronger national shipping line.