India accelerates maritime expansion plan amid Strait of Hormuz concerns

An inter-ministerial review meeting convened in the context of Strait of Hormuz tensions accelerated India's merchant fleet expansion programme, committing t...

What Happened

An inter-ministerial review meeting convened in the context of Strait of Hormuz tensions accelerated India's merchant fleet expansion programme, committing to add 62 vessels in FY2026-27 with a total investment of ₹51,383 crore.
The expansion will create an additional 2.85 million gross tonnage (GT) of shipping capacity and includes container ships, LPG carriers, crude oil tankers, dredging vessels, and green tugs.
A joint venture between the Shipping Corporation of India (SCI) and oil-sector public sector undertakings is planned to acquire 59 vessels specifically to support India's energy transport requirements — reducing dependence on foreign-flag tankers for crude oil shipments.
A white paper on actionable gaps in Indian maritime supply chains was directed to be prepared by the participating ministries.
The review identified the vulnerability created by dependence on foreign shipping capacity for energy imports at a time when geopolitical risk around the Strait of Hormuz is elevated.

Static Topic Bridges

The Strait of Hormuz: Global Oil Chokepoint

The Strait of Hormuz is a narrow waterway between the Persian Gulf and the Gulf of Oman, at its narrowest approximately 33 kilometres wide. It is the world's single most critical oil transit chokepoint, with approximately 20 million barrels per day (mb/d) of crude oil and petroleum products transiting it — accounting for roughly 20–25% of global seaborne oil and approximately 34% of global crude oil trade. Countries including Iran, Iraq, Kuwait, Qatar, and Bahrain have no practical large-scale alternative export route.

Approximately 40% of India's crude oil imports pass through the Strait of Hormuz, making India directly exposed to any closure or restriction.
Only Saudi Arabia and UAE have operational bypass crude pipelines (combined capacity ~3.5–5.5 mb/d), which is far insufficient to offset a full Hormuz closure.
The Strait also handles a significant share of global LNG exports; Qatar and UAE together account for nearly 20% of global LNG exports, virtually all of which routes through Hormuz.
Any prolonged disruption to Hormuz would cause an immediate spike in global crude and LNG prices, with cascading effects on India's import bill, fiscal deficit, and inflation.

Connection to this news: The inter-ministerial review was directly triggered by Hormuz tensions, and the decision to accelerate fleet expansion is an explicit policy response to reduce India's freight dependency on foreign-flagged tankers for energy imports during periods of geopolitical stress.

India's Merchant Fleet and the Shipping Corporation of India (SCI)

India's merchant fleet capacity has historically lagged the scale of its maritime trade needs, leaving the country dependent on foreign-flag vessels for the bulk of its cargo — particularly crude oil. This "flag gap" means that during crises, freight rates spike (since global shipping capacity is constrained), and India has limited leverage to ensure priority access to tonnage. The Shipping Corporation of India (SCI) is India's largest state-owned shipping company, operating across tankers, bulk carriers, container ships, and passenger services.

India is the 16th largest maritime nation by fleet size, but its share of cargo carried by Indian-flagged vessels is only around 5–7%, against a target of 20%+.
Domestic shipbuilding capacity remains limited; India accounts for less than 1% of global ship-building output, compared to South Korea (30%+), China (45%+), and Japan (15%+).
The Maritime India Vision 2030 (MIV 2030) targets making India a top 10 shipbuilding nation, developing major ship repair clusters, and increasing the Indian shipping fleet to handle 25% of national trade.
The Sagarmala Programme provides a complementary infrastructure framework for port modernisation and coastal connectivity.

Connection to this news: The 62-vessel expansion plan, backed by ₹51,383 crore, is the largest single-year fleet addition push under MIV 2030's framework, directly addressing the freight vulnerability exposed by the Hormuz crisis by building Indian-flag capacity in tankers, LPG carriers, and other energy-transport vessel types.

Atmanirbhar Bharat and Energy Transport Security

Energy security encompasses the reliable, affordable, and sustainable availability of energy. For India, which imports ~85% of its crude oil, energy security has three key dimensions: source diversification (from which countries), route diversification (through which sea lanes), and freight sovereignty (on whose ships). The current crisis has spotlighted freight sovereignty — India's inability to control shipping capacity during crises — as a strategic gap. The Atmanirbhar Bharat (self-reliant India) framework applied to maritime transport implies building domestic tanker capacity so that Indian state-owned or private vessels can carry Indian energy imports.

The SCI–oil PSU joint venture to acquire 59 vessels is explicitly structured to carry crude oil for Indian refiners, ensuring access to Indian-flag tonnage even when global freight markets tighten.
Green tugs included in the fleet plan reflect India's commitment to decarbonising port operations, aligned with the International Maritime Organization's 2050 net-zero ambition.
LPG carriers are strategically important as India is the world's largest LPG importer, with the bulk of supplies coming from the Gulf through Hormuz.

Connection to this news: The joint-venture tanker fleet between SCI and oil PSUs directly addresses freight sovereignty — a dimension of energy security that existing policy frameworks had not fully operationalised until the Hormuz tensions created an urgent review imperative.

Key Facts & Data

62 vessels to be added in FY2026-27 under the accelerated plan.
Total investment: ₹51,383 crore.
Additional capacity: 2.85 million GT (gross tonnage).
SCI–oil PSU JV plans to acquire 59 vessels for energy transport.
~40% of India's crude oil imports pass through the Strait of Hormuz.
Strait of Hormuz handles approximately 20 million barrels per day of oil and petroleum products.
~34% of global crude oil trade transits the Strait of Hormuz.
Qatar and UAE together account for ~20% of global LNG exports — nearly all via Hormuz.
India's current share of cargo carried by Indian-flag vessels: approximately 5–7% (target: 25%).
Maritime India Vision 2030 targets India as a top 10 shipbuilding nation.
The Sagarmala Programme is the parallel port and coastal connectivity initiative.