India is set to emerge as a major hub for LNG-powered container vessels following CMA CGM’s US$ 300 million agreement with Cochin Shipyard to construct six ships, marking the country’s first global container order. Each 1,700 TEU vessel will sail under the Indian flag, promoting decarbonisation and maritime growth.
Supported by the government’s Rs 69,725-crore shipbuilding package and policies such as SBFAP, RoFR, and other green initiatives, domestic capabilities are being strengthened. Collaborations with HD Korea Shipbuilding, state agencies, and funding from Sagarmala Finance Corporation aim to enhance employment, MSME involvement, technological innovation, and India’s global shipbuilding competitiveness, targeting a top-five ranking by 2047.
India has emerged as a potential hub for constructing small liquefied natural gas (LNG)-powered container vessels, according to Mr Rodolphe Saadé, chairman and CEO of France-based CMA CGM, the world’s third-largest container shipping company.
In a landmark move for the domestic shipbuilding sector, CMA CGM has signed a letter of intent with Cochin Shipyard Ltd to build six LNG-fuelled container ships valued at around US$300 million. This marks the first time a global mainline operator has placed a container ship order in India.
The order represents a pivotal achievement for Mumbai-listed Cochin Shipyard, which has previously built India’s first locally made aircraft carrier, the largest dredger, naval ships, and various specialized vessels for European customers. Its recent partnership with South Korea’s HD Korea Shipbuilding & Offshore Engineering Co Ltd (KSOE), one of the world’s leading shipbuilders, largely bolstered CMA CGM’s confidence to finalize the order after months of negotiations.
Mr. Saadé expressed admiration for Prime Minister Narendra Modi, noting, their conversation felt more like a discussion with a business leader than with a head of state. According to Saadé, Modi’s approach combined political acumen with a sharp understanding of business dynamics.
The deal is widely regarded as a breakthrough for Indian shipbuilders who have long sought a foothold in the global market. It comes shortly after the government approved a Rs 69,725-crore package in September aimed at strengthening the country’s shipbuilding capabilities and enhancing competitiveness with established leaders such as China, South Korea, and Japan.
Currently, India ranks 16th globally in shipbuilding, accounting for less than 1% of worldwide output.
The CMA CGM agreement, however, is expected to significantly boost India’s international standing in the global shipbuilding arena, with the government targeting a position among the top 10 shipbuilding nations by 2030 and reaching the top five by 2047.
Strategic significance and green initiatives
Mr Saadé noted that CMA CGM has traditionally placed orders for larger vessels in China and South Korea, but India now offers a viable alternative for smaller LNG-powered ships. He described this as the start of a “long-term success story,” underscoring India’s growing capabilities in advanced shipbuilding.
The deal comes after CMA CGM recently reflagged four of its container ships under the Indian flag, fulfilling a commitment Mr Saadé made to Prime Minister Modi during his visit to CMA CGM’s Marseille headquarters on February 12—a rare occasion for an Indian PM to visit a global shipping giant, underscoring the government’s emphasis on maritime infrastructure as a key driver of trade growth.
Mr Saadé confirmed that the six new ships to be constructed at Cochin Shipyard will also be registered under the Indian flag. While CMA CGM already maintains a significant presence in India’s shipping and logistics ecosystem, he described this investment as representing “a different magnitude” in the company’s engagement with India.
Mr Saadé traced the origins of the deal to a meeting between PM Modi and French President Emmanuel Macron, during which the Prime Minister encouraged CMA CGM to invest in India, assuring full government support. After several months of close collaboration between the Indian government, Cochin Shipyard, and CMA CGM, the company is now set to proceed with the construction of six LNG-powered container ships. Each of the six vessels, with a capacity of 1,700 TEUs (twenty-foot equivalent units), will be powered by LNG, underscoring CMA CGM’s commitment to decarbonising maritime transport and marking a historic milestone in India’s progress toward becoming a major global shipbuilding hub.
India’s shipbuilding sector- a glance
Shipbuilding, often referred to as the “mother of heavy engineering,” plays a crucial role in India’s economic and strategic landscape by generating employment, attracting investment, and strengthening national security and self-reliance. Each investment in the sector creates jobs 6.4 times over and yields 1.8 times the invested capital, highlighting the industry’s capacity to drive growth and development. Its expansion holds particular promise for generating large-scale employment in remote, coastal, and rural regions, making it a key pillar in the government’s vision of an Atmanirbhar Bharat.
India’s shipping and maritime sector has undergone significant transformation, with notable progress in cruise tourism, inland water transport, and port infrastructure. Strategic investments, policy reforms, and the expansion of waterways have collectively enhanced cargo movement, coastal connectivity, and employment opportunities, positioning the sector as a major driver of economic growth and regional integration. As of November 2024, India’s fleet comprises 1,552 Indian-flagged vessels totaling 13.65 million Gross Tonnage (GT).
The government has introduced a series of policies and initiatives to strengthen domestic shipbuilding capabilities. These include,
Strategic partnerships and collaborations further support India’s shipbuilding growth.
The Shipping Corporation of India and oil public sector undertakings (PSUs) signed a memorandum of understanding (MoU) to form a vessel-owning joint venture, reducing reliance on foreign fleets and boosting demand for Indian-built ships.
MoUs between major ports and coastal states aim to develop shipbuilding clusters, integrating shipyards, R&D, MSMEs, and green innovation, with the goal of placing India among the top five global shipbuilding nations by 2047.
Cochin Shipyard and Mazagon Dock have partnered with Tamil Nadu agencies to establish major shipbuilding complexes, including a ₹15,000 crore facility with an annual capacity of one million GT, generating large-scale employment.
The Sagarmala Finance Corporation has signed agreements with key financial institutions to provide funding for green shipbuilding, fleet modernization, and maritime logistics, leveraging global climate finance alongside domestic capital.
Cochin Shipyard’s partnership with HD Korea Shipbuilding aims to produce large commercial vessels in India, supported by a new dry dock and a planned ₹3,700 crore fabrication facility in Kochi, expected to create thousands of jobs and strengthen MSME-linked supply chains.
With progressive policy support, modernized infrastructure, and global collaborations, India’s shipbuilding sector is entering a promising phase of growth. These measures aim to enhance domestic manufacturing, attract international investment, and build a sustainable and innovative maritime ecosystem. By focusing on skill development, green technologies, and strategic capacity expansion, the industry is well-positioned to achieve the objectives of Maritime India Vision 2030. Its growth also aligns with the broader national ambition of Viksit Bharat 2047, contributing to economic resilience, employment generation, and global competitiveness.
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FAQs
What is the CMA CGM–Cochin Shipyard deal? CMA CGM signed a US$300 million agreement with Cochin Shipyard to build six LNG-powered container ships, marking the first global mainline container order placed in India.
What are the specifications and significance of these vessels? Each ship has a capacity of 1,700 TEUs, will run on LNG, and be Indian-flagged, supporting decarbonisation and strengthening India’s maritime capabilities.
How is the government supporting domestic shipbuilding? Through policies like the Shipbuilding Financial Assistance Policy (SBFAP), Right of First Refusal (RoFR), Make in India guidelines, and green initiatives such as GTTP and Harit Nauka Guidelines.
What partnerships and collaborations are involved? Cochin Shipyard collaborates with HD Korea Shipbuilding, Mazagon Dock, Tamil Nadu agencies, and Sagarmala Finance Corporation to enhance infrastructure, skill development, and green shipbuilding.
What are India’s long-term shipbuilding goals and benefits? India aims to rise from 16th to a top-five global shipbuilding nation by 2047. The sector will generate employment, boost MSME participation, enhance technology, and improve global competitiveness.
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