Indian Oil Corporation (IOC) is likely to place an order for at least 10 Aframax crude oil tankers with a Shipping Corporation of India (SCI)-led joint venture, marking a major step in India’s push to build energy transport capacity indigenously, sources said. The vessels are expected to be built at a domestic shipyard, with Cochin Shipyard emerging as a strong contender.
India, the world’s third-largest oil importer and consumer, relies heavily on foreign-owned vessels for transporting its energy supplies. More than 85 per cent of the nearly USD 100 billion paid in freight costs in recent years has gone to foreign shipping companies. Keen on reversing this trend, the government has been nudging state-run oil firms to secure supply chains by investing in a domestic fleet while boosting job creation through shipbuilding.
Initially, state oil companies had explored setting up a dedicated shipping company to build vessels in India, but the plan stalled due to a lack of shipbuilding expertise and cost advantages offered by Chinese shipyards. Later, the option of a three-way joint venture with a foreign shipyard, an Indian shipbuilder, and an operator was considered. IOC eventually picked up the proposal, which has now evolved into a direct collaboration with SCI and Indian yards.
Sources said IOC’s upcoming order for 10 Aframax-class ships—capable of carrying 80,000 to 120,000 deadweight tons—could pave the way for other oil companies to follow suit. Collectively, India’s state-owned oil companies will need as many as 112 crude carriers by 2040 to replace their largely chartered fleet.
The announcement is expected on September 20, when Prime Minister Narendra Modi will launch India’s global shipbuilding initiative from Bhavnagar, Gujarat—home to the Alang ship recycling yard. On the same day, the government is likely to unveil a revamped Ship Building Financial Assistance (SBFA) scheme, a ₹25,000 crore Maritime Development Fund (MDF), and a ₹20,000 crore plan for shipbuilding clusters in Gujarat, Andhra Pradesh, Odisha and Maharashtra.
According to industry estimates, the first phase of the program will involve procuring 79 vessels, including 30 medium-range tankers. The target is to raise the share of domestically built oil tankers in the Indian fleet to 7 per cent by 2030, from the current 5 per cent, and to about 70 per cent by 2047.
Global shipbuilding giants such as HD Hyundai Heavy Industries and Samsung Heavy Industries of South Korea, along with Japan’s Mitsui OSK Lines and NYK Line, have expressed interest in partnering with Indian shipyards to build these vessels, the sources added.
If implemented as planned, the initiative is set to not only strengthen India’s energy security but also position the country as a credible player in the global shipbuilding market.
