Cochin Shipyard Ltd, Swan Defence and Heavy Industries Limited, L&T Shipbuilding Ltd, and a consortium of Garden Reach Shipbuilders & Engineers Ltd (GRSE) and Hindustan Shipyard Ltd (HSL) have submitted initial bids for a tender floated by Shipping Corporation of India Ltd (SCI) to construct two firm and two optional dual-fuel-ready Medium Range (MR) product tankers, a project potentially worth over $200 million.
Cochin Shipyard has partnered with South Korea’s HD Korea Shipbuilding & Offshore Engineering Co Ltd (KSOE), while Swan Defence and Heavy Industries has partnered with Samsung Heavy Industries, one of South Korea’s top three shipbuilders. L&T Shipbuilding has submitted qualification documents in collaboration with Hanwha Ocean Co Ltd, supported by design inputs from KmsEmec Co Ltd.
This marks the first major attempt in decades to build oil tankers in India, as part of the government’s ambitious plan to scale up domestic shipbuilding under a ₹69,725-crore incentive package approved by the Cabinet in September. Currently, a medium-range product carrier costs around $50–60 million to build. India aims to become one of the world’s top 10 shipbuilders by 2030 and reach the top five by 2047. Presently, India holds just 0.07% of the global shipbuilding market and less than 1% of global shipping tonnage.
The MR tankers will be acquired by a joint venture of SCI and state-owned oil refiners, including Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Ltd, and Oil and Natural Gas Corporation Ltd. The ships are primarily intended for use by state-owned oil companies.
In a strategic move, GRSE and HSL signed a Memorandum of Understanding (MoU) on February 9 to form a consortium for large-scale national shipbuilding projects. The partnership aims to leverage HSL’s infrastructure and GRSE’s financial strength to strengthen indigenous shipbuilding capabilities.
Industry sources, however, have raised concerns over the tender’s terms. Bidders have requested changes to the fixed-price contract linked to rupee-denominated payments for dollar-imported components, which they say poses significant foreign exchange risks. They also flagged the “unlimited liquidated damages” clause for delays and performance, which contravenes government rules that typically cap such penalties at 10% of the contract value.
Over the next 15 years, state-owned oil companies plan to acquire 59 ships, including two MR tankers, five very large crude carriers, nine Suezmax tankers, four Aframax carriers, two very large ethane carriers, eight very large gas carriers, four LNG carriers, 11 platform supply vessels, ten anchor handling, towage and supply vessels, and four offshore supply vessels — collectively worth around ₹85,400 crore.
The MR tanker tender is thus seen as the first step in India’s effort to emulate China’s successful state-driven shipbuilding model, which has made the country the world’s largest shipbuilder.
