India could emerge as a regional hub for low- and zero-carbon marine fuels by leveraging its strategic location along major East-West shipping routes, strong cargo flows and growing renewable energy capacity, according to a study by classification society DNV for the International Maritime Organization (IMO) and India’s Directorate General of Shipping.
The study recommends a phased development strategy, beginning with pilot projects at selected container ports by 2030, expanding into regional bunkering clusters by 2035 and establishing multi-fuel hubs by 2047.
While India’s potential alternative marine fuel demand remains modest compared with established bunkering centres, DNV’s modelling indicates significant opportunities for growth. Under its most optimistic scenario, India could capture 80% of Sri Lanka’s container transhipment business, with alternative fuel demand reaching 293 petajoules by 2047, equivalent to approximately 7.30 million tonnes of heavy fuel oil (HFO).
Under the slowest-growth scenario, demand would reach 113 petajoules, equivalent to around 2.80 million tonnes of HFO. The intermediate scenario assumes India captures half of Sri Lanka’s container transhipment traffic. DNV emphasised that these projections are its own modelled scenarios and not official Indian government targets.
The scale of the challenge remains substantial. Singapore sold 54.92 million tonnes of bunker fuel in 2024, compared with 2.25 million tonnes across Indian ports.
Cost Competitiveness Critical to Attracting Ships
Fuel pricing will be a decisive factor in determining whether vessels choose Indian ports for bunkering. According to DNV’s case study, India would need to offer bio-methanol at approximately $30 per gigajoule (GJ), around 5.5% below the competing hub price of $32/GJ, to encourage a large container ship to divert from its existing route for bunkering.
The study also recommends exempting alternative marine fuels from the 5% Goods and Services Tax (GST) currently applicable to bunker fuel supplied to foreign-going vessels, helping improve India’s price competitiveness.
India’s green fuel production economics offer encouraging prospects. The Solar Energy Corporation of India (SECI) conducted 13 green ammonia auctions in July and August 2025 for 10-year supply contracts to fertiliser plants. The Ministry of New and Renewable Energy indicated that the initial auction price was significantly below the price discovered in the 2024 H2Global auction, although it remained higher than conventional grey ammonia. Producers are also eligible for incentives during their first three years.
DNV’s analysis suggests that ammonia available at around these price levels could fall within its projected competitive range for marine fuel markets in 2035 and 2047.
Mundra, Kandla and Major Container Ports in Focus
The report recommends concentrating initial investments at ports with established container shipping activity. Mundra has been proposed as the location for a methanol bunkering pilot, supplied by the green hydrogen hub at Deendayal Port in Kandla, approximately 75 km away.
Jawaharlal Nehru Port and the Chennai-Tuticorin corridor are identified as subsequent locations for development.
By 2035, DNV proposes establishing two regional clusters: a western cluster connecting Kandla, Mundra and Jawaharlal Nehru Port, and an eastern cluster linking Chennai, Tuticorin, Paradip and Visakhapatnam.
Further expansion would depend on demonstrated demand, dependable fuel supplies and the availability of specialised bunkering vessels. Industry representatives consulted for the study identified the limited availability of such vessels as a potential constraint.
Ammonia bunkering is expected to follow methanol, with interim safety guidelines recommended for two to three pilot ports during 2030–2035.
Projects Underway to Support Green Bunkering
Several initiatives are already supporting India’s ambitions. A proposed e-methanol plant at Kandla, with a planned capacity of 150 tonnes per day, is being developed in phases. Its first phase, with a capacity of 50 tonnes per day, is targeted for January 2027. The Ministry of Ports, Shipping and Waterways has indicated that the entire output is earmarked for vessels operating on the Asia-Europe trade route.
Meanwhile, VO Chidambaranar Port in Tuticorin has conducted methanol bunkering drills, marking progress towards developing operational capabilities for alternative marine fuels.
The study also highlights the potential of green shipping corridors connecting India with major international hubs such as Rotterdam and Singapore. Such partnerships could help coordinate fuel production, supply infrastructure and vessel demand, supporting the commercial viability of low-carbon bunkering.
With targeted investments, competitive fuel pricing, supportive taxation policies and coordinated infrastructure development, India could gradually establish itself as an alternative marine fuel supplier on major international shipping routes, without needing to replicate Singapore’s existing scale.