India eyes Bangladesh's shipbreaking industry
India is gearing up to challenge Bangladesh and Pakistan in the global shipbreaking business with a hefty $454 million (40 billion rupees) incentive package.
The plan, expected to roll out from 2026, will stretch over a decade and is likely to receive cabinet approval by the end of this month, Bloomberg reported.
Under the scheme, ship owners scrapping their vessels in India will receive a credit note equivalent to about 40% of the ship’s scrap value. These notes, valid for three years, can be redeemed when purchasing ships built domestically. Owners will also be allowed to trade or combine the notes, making them a flexible financial tool to encourage recycling in Indian yards.
The move comes as India tries to reclaim lost ground in the ship recycling industry, which is crucial both for steel recovery and for employment in coastal regions like Gujarat’s Alang, once the world’s largest shipbreaking hub. Although India dismantled roughly one-third of all end-of-life ships in 2023, it still trailed far behind Bangladesh, which handled 46% of the global total. Pakistan, despite political and economic instability, also remains a key player.
Analysts say the government’s strategy is not just about economics but also about cutting reliance on imported scrap steel and strengthening India’s maritime industry. By linking incentives to the purchase of India-made ships, New Delhi is seeking to create a feedback loop—supporting domestic shipbuilders while making local recycling more attractive.
India has been under pressure to improve safety and environmental practices at its shipbreaking yards, which have often drawn criticism for poor working conditions and pollution. Officials hope that a large-scale modernization drive, backed by these incentives, will help Indian facilities meet stricter international norms, potentially luring more global shipowners who are now cautious about where they dismantle their fleets.
If approved, this would be one of the largest government interventions in India’s shipbreaking industry in decades—a sign that New Delhi is determined to chip away at Bangladesh’s lead in a sector that plays a quiet but critical role in global trade.
.png "Advertisement")
