In a major push toward energy security and self-reliance, state-run Shipping Corporation of India Ltd (SCI) has signed a memorandum of understanding (MoU) with public sector oil and gas giants Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) to form a joint venture (JV) aimed at acquiring Indian-built ships.
The JV, announced on Saturday in Bhavnagar, will focus on purchasing vessels from local shipyards to reduce India’s heavy dependence on foreign-flagged ships for crude oil and fuel imports. The initiative aligns with the government’s Aatmanirbhar Bharat mission, aiming to enhance India’s maritime capabilities while cutting the annual foreign exchange outgo of an estimated $75–80 billion in shipping freight bills.
Under the agreement, SCI will contribute technical, operational, and regulatory expertise, while the three oil PSUs will commit cargo volumes through long-term charter contracts to support the viability of the new venture.
Officials said the move is part of a broader strategy to bolster India’s shipping fleet and reduce reliance on foreign vessels, particularly for energy imports transported on a Free-on-Board (FOB) basis, where buyers arrange their own shipping. Currently, a large portion of this trade is carried on foreign vessels due to a shortage of Indian-flagged ships.
The government had earlier designated IOCL as the nodal agency to streamline procurement of medium-range (MR) tankers for itself, BPCL, and HPCL. However, a previous plan to order 10 MR tankers from Indian yards stalled despite a directive from the Prime Minister’s Office (PMO) to initiate the process by June. IOCL delayed the tender amid opposition from the Indian National Shipowners’ Association (INSA), which argued that over 30 Indian-flagged MR tankers were already available to meet current demand.
With the formation of this new JV, officials are hopeful that such bottlenecks can be addressed more efficiently, allowing for smoother execution of domestic ship acquisition plans and paving the way for a more robust Indian shipping sector.