India to Invest $10 Billion in Homebuilt 79 Oil Tankers to Strengthen Energy Security

India is making a major push to enhance its energy security and build its maritime capabilities by planning a massive investment of ₹850 billion (around $10 billion) to develop a fleet of homebuilt oil tankers. This ambitious plan, which stretches through to the year 2040, aims to reduce India’s dependency on foreign-owned ships and support the growth of its domestic shipbuilding industry.

At present, most of the oil tankers used by India’s state-run oil companies are old and leased from foreign companies. Recognizing the risk in this dependency, the Indian government now wants to ensure that its energy trade — particularly crude oil imports — is backed by a strong, self-owned shipping fleet. The first phase of the plan includes acquiring 79 tankers, including 30 medium-range vessels. A purchase order for the first 10 ships is expected to be released soon.

One of the key conditions of this initiative is that all ships must be built in India, though partnerships with international firms will be allowed. This step is part of a broader vision to encourage local manufacturing and create a robust ecosystem for shipbuilding.

Although the global trend is moving toward cleaner energy, India is simultaneously expanding its oil refining capacity to meet growing domestic and export demands. Refining capacity is expected to jump from 250 million tons per year to 450 million tons by 2030. Given that India imports most of its crude oil, the need for a self-owned, reliable tanker fleet becomes even more important.

Currently, just 5% of India’s oil tankers are built domestically. The goal is to raise that share to 7% by 2030, and an ambitious 69% by 2047 — the year by which India aims to become a developed nation.

To support this transition, the Indian government has launched a ₹250 billion maritime fund this year. The fund is aimed at reducing reliance on foreign-built vessels, providing a significant boost to local shipbuilders, and attracting global firms to collaborate in building ships in India.

But the plan doesn’t stop with oil tankers. India also intends to expand its shipbuilding capabilities to cover other bulk carriers like those used for coal, fertilizers, and steel. These too will increasingly be built in India.

However, the journey ahead won’t be without challenges. India’s shipbuilding industry is still in its early stages and lacks the scale seen in global shipbuilding giants like China and South Korea. The country’s largest locally-built oil tanker — the MT Maharshi Parashuram — while impressive at 238 meters in length and with a capacity of over 93,000 metric tons, is still far smaller than the world’s biggest tankers, such as the 380-meter-long Oceania from China.

To bridge this gap, India is inviting established global players to help develop its domestic capacity. Discussions are ongoing with South Korea’s HD Hyundai Heavy Industries to set up a shipbuilding facility in Kochi. Other talks have involved Samsung Heavy Industries and Japan’s NYK Line. These collaborations, coupled with government incentives, are expected to bring in the technical know-how and scale needed for the industry to grow.

This strategic investment is not just about oil or ships — it’s about securing the country’s future. By reducing reliance on foreign shipping services, especially from countries like China, India is making a move to strengthen its control over its critical energy lifelines. Former Mumbai Port Trust chairman Rajiv Jalota put it succinctly: “The world needs to develop alternatives.”

India’s $10 billion bet on homegrown oil tankers reflects a bold step toward energy security, industrial growth, and reduced foreign dependency — a move aligned with its broader vision of becoming a self-reliant and developed nation by 2047.