The Fleet That India Needs

Every time tensions rise around the Strait of Hormuz, India worries about energy security. Given that the country imports more than 85% of its crude oil requirements, that concern is entirely justified.

Yet there is another question we rarely ask. Who owns the ships carrying that oil?

The answer points to a vulnerability that rarely gets the attention it deserves. Nearly 95% of India's trade by volume moves by sea, but Indian-flagged vessels carry only a small share of that trade. We rarely think about shipping until something goes wrong. Yet every day, thousands of vessels quietly carry the energy, raw materials and manufactured goods that keep the global economy running.

In a world shaped by supply chain disruptions and recurring tensions around strategic chokepoints such as the Strait of Hormuz, that dependence is no longer merely a commercial issue. It is increasingly a question of economic resilience.

This is hardly a new lesson. India understood it long before the modern nation state existed.

The Cholas built some of the most powerful naval and commercial networks in the Indian Ocean, connecting India with Southeast Asia and helping extend its economic and cultural influence far beyond its shores.

The underlying principle has changed little since. Britain built a merchant fleet alongside its industrial rise. Japan and South Korea paired manufacturing growth with shipping and shipbuilding capabilities. China took the same approach, but at a much larger scale. Decades ago, it recognised that ports alone were not enough. It built shipping lines, shipyards, maritime finance institutions and logistics networks alongside them. Today, it dominates global shipbuilding and is one of the most influential players in global maritime commerce.

Few major economies are as well positioned for maritime success as India. Sitting at the centre of the Indian Ocean, India is located near some of the world's busiest trade routes. Yet our presence in commercial shipping remains far smaller than our economic weight would suggest.

What makes this gap particularly striking is that India has achieved remarkable progress elsewhere in the maritime sector. Over the past decade, ports have expanded capacity, improved efficiency and become significantly more competitive. The transformation of the port sector is one of the quieter success stories of India's infrastructure journey.

Yet ports and ships play very different roles. Ports facilitate trade, but ships determine who captures a larger share of the value created by that trade. One is infrastructure. The other is strategic capability.

A country can own world class ports and still remain dependent if foreign vessels dominate the movement of its cargo. That is the position India finds itself in today.

Encouragingly, the government has begun treating this challenge with the seriousness it deserves. Maritime India Vision 2030, the Maritime Amrit Kaal Vision 2047 roadmap, the Maritime Development Fund, shipbuilding incentive schemes and recent maritime reforms all point in the same direction. The government wants India to become not just a port power, but a shipping power.

These initiatives reflect a growing recognition that maritime capability extends beyond ports to include shipbuilding, maritime finance, logistics and commercial shipping. GIFT City has already begun emerging as a centre for ship leasing and maritime finance, providing an important building block for a broader shipping ecosystem.

The opportunity could not come at a better time. Global supply chains are being reconfigured, manufacturers are diversifying production bases and governments are placing greater emphasis on economic resilience. India is positioning itself as a trusted manufacturing destination and an increasingly important logistics hub.

As global companies expand manufacturing operations in India, the country's dependence on foreign shipping becomes increasingly difficult to ignore. It is hard to become a global manufacturing hub while relying overwhelmingly on others to transport your goods.

The challenge now is execution. India needs more ships, stronger shipyards and globally competitive shipping companies supported by better access to maritime finance. The case extends beyond logistics and resilience. Every year, India pays billions of dollars in freight and maritime service costs to foreign operators, exposing businesses to fluctuations in the rupee-dollar exchange rate and adding to external vulnerabilities. Most importantly, shipping must be viewed not as a niche industry but as a strategic capability that underpins economic security, energy security and resilient supply chains.

For a country with one of the world's oldest maritime traditions, opportunities of this scale do not come around often. The ambition to build a stronger merchant fleet is not a departure from history. It is, in many ways, a return to it.

India has already shown through the transformation of its ports that it can revitalise sectors once considered stagnant. The next phase of that journey is clear. It is not enough to move more cargo through Indian ports. India must carry more of that cargo on Indian ships.

The next time tensions flare in the Strait of Hormuz, India will rightly worry about oil supplies. But the larger issue is not energy alone. It is whether a country that aspires to be a major trading power is willing to build the shipping capability that such status demands.

A nation that depends on the sea for its prosperity should have a far greater stake in the vessels that keep its economy moving.

Bansidhar Bandi is Director at Vizag Profiles Logistics, has previously served at NITI Aayog, and co-chairs the ASSOCHAM Andhra Pradesh Chapter. Views are personal.