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Puneet Kumar Bahl, “Maritime Sector Development: A Gateway to Viksit Bharat,” ORF Occasional Paper No. 517, Observer Research Foundation, February 2026.
Currently the world’s fourth-largest economy in nominal Gross Domestic Product (GDP) terms, India is poised to become the third-largest by 2028,[1] driven by strong domestic demand, a young workforce, a growing middle class, and thriving sectors like Information Technology (IT), agriculture, and manufacturing. In 2023, the Indian economy contributed 16 percent of global growth.[2] As India’s global profile rises, its maritime sector is emerging as a linchpin for commerce, connectivity, and international cooperation.
In this context, it is important to understand the strengths of the Blue Economy and the steps India is taking in this direction. This paper provides an overview of the blue economy, with a focus on shipping, port-led development, inland waterways (IW), and cruise sector development through government schemes that hold promise for shaping India’s maritime sector development in the coming years.
India was often described as the proverbial ‘Golden Sparrow’ over a long period, from 3,000 BCE to 1,000 CE, when it accounted for more than 30 percent of global GDP.[3] The country also possesses a rich maritime legacy dating back over 5,000 years to the Indus Valley Civilisation. The Rig Veda (compiled between 1,500-1,200 BCE)[4] refers to Lord Varuna, the God of the Seas, and credits him with oceanic knowledge. Powerful dynasties such as the Cholas, Cheras, and Pandyas maintained maritime trade links with Southeast Asia and beyond.[5] Trade and a vibrant maritime culture flourished, resulting in prosperity for the people.
The Indian subcontinent exercised great influence over the Indian Ocean Region from early times until the 13th century. The arrival of Europeans between the 15th century and 17th centuries, largely via maritime routes, eventually led to British colonisation, despite strong resistance at sea from regional leaders like the Marathas and Zamorins. Consequently, India’s share of global income declined from 23 percent in 1700 (nearly equal to Europe’s at that time) to as low as 3.8 percent in 1952.[6] This historical trajectory underscores that India’s earlier economic and maritime strength was substantial. The current endeavour seeks to reclaim this legacy through the Amrit Kaal Vision 2047.
India has a strong maritime orientation, reinforced by its geography. The Indian Ocean bears its name, and the country’s peninsular character gives it a strategic location astride key global maritime trade routes. With an 11,098-km coastline, a resource-rich Exclusive Economic Zone (EEZ) of 2.3 million square km, and 14,500 km of inland waterways—only now beginning to be utilised for commerce—the potential for the Blue Economy is huge.[a] Currently, it contributes 4 percent to India’s GDP,[7] with aspirations to reach double-digit levels by 2047. By comparison, China’s maritime economy accounts for 7.9 percent of GDP, and in most ASEAN states, over 20 percent.[8]
The following paragraphs describe the key sectors of the Blue Economy.
Port-led Development and Shipping: This underpins the national logistics efficiency. India currently has 12 major ports, one large privately owned port, and two additional major ports under development, alongside 217 non-major ports. Together, these ports account for approximately 95 percent of the country’s trade by volume and 70 percent by value.[9] Of the total cargo handled, over 54 percent moves through the major ports.[10] Marine transport is also the most cost-effective mode for carrying large volumes of cargo and oil over long distances, compared to road, rail, oil pipelines, or air. Coastal shipping costs are about 21 percent of road transport and 42 percent of rail transport. It also requires significantly less fuel—around 15 percent of road consumption and 54 percent of rail consumption. Moreover, CO2 emissions from rail transport are roughly double those from road transport and six times higher than those from coastal shipping.[11] Maritime transport is therefore central to India's trade, and efforts are underway to enhance its sustainability. The Maritime Amrit Kaal Vision (MAKV) 2047 outlines measures to decarbonise shipping, promote green fuels such as hydrogen and ammonia, and create carbon-neutral ports. These initiatives seek to align India’s maritime sector with global industry initiatives led by the International Maritime Organisation (IMO) to achieve net-zero greenhouse gas (GHG) emissions around 2050. India has also committed to achieving economy-wide net-zero emissions by 2070.[12]
Renewable Energy: Harnessing wave, tidal, and offshore wind energy is an important element of India’s clean energy transition. The country aims to harness 30 GW of offshore wind energy capacity by 2030, particularly along the coasts of Gujarat and Tamil Nadu,[13] through progress is expected to be gradual due to high upfront costs.
Deep-Sea Resources: India’s Deep Ocean Mission, launched in 2021, aims to explore seabed resources and marine biodiversity. The International Seabed Authority (ISA) has granted India rights to undertake deep-sea mining over a 75,000 sq km area in the Central Indian Ocean Basin (CIOB).[14]
Marine Biotechnology: This is an emerging and promising domain, focused on developing pharmaceuticals, biofuels, and other high-value products from marine organisms. As global demand for food and resources intensifies, pressures on terrestrial ecosystems are increasing, prompting countries to explore new frontiers such as the Arctic, Antarctic, space, and the deep ocean.
Fishing: India is the third-largest fish producer globally (19.5 million tonnes (MT) annually) after China (88.6 MT) and Indonesia (22 MT).[15] The sector supports over 60 million livelihoods, with women accounting for around 24 percent of the workforce. The PM Matsya Sampada Yojana aims to raise fish production to 22 MT by 2025 through aquaculture growth and infrastructure support.[16]
The following initiatives are energising India’s maritime sector:
The maritime sector is witnessing notable growth, driven by multiple government initiatives running in parallel. India’s merchant fleet expanded from 1,213 vessels in 2014 to 1,526 in 2023, placing it 18th globally, though it accounts for only 1.3 percent of global capacity.[20] Similarly, while India ranks around 20th in global shipbuilding capacity, its market share remains below 1 percent, compared to nearly 90 percent held collectively by China, South Korea, and Japan. India has set ambitious targets to enter the top ten shipbuilding nations by 2030 and the top five by 2047.[21] While challenging, these goals reflect the scale of opportunity, as global trade is projected to expand from about US$32 trillion today to much higher levels by 2050, underscoring the maritime sector’s long-term potential.
Figure 1: Global Trade Volume (2015-2050)
Source: WTO and OECD estimates; medium- and long-term projections extrapolated by the author.[22]
Figure 1 shows a steady increase—from approximately US$16 trillion in 2015 to over US$96 trillion by 2050.
India paid US$75 billion—almost equivalent to its annual defence budget—in sea freight in 2023 to foreign-owned vessels, recorded under “transport services” in India’s balance of payments.[23] Reliance on foreign merchant shipping exposes trade to disruptions arising from geopolitical developments, demand-supply shocks, and the policy constraints of flag states.
The MIV 2030 envisages total investments of INR 3-3.5 lakh crore across ports, shipping, and inland waterways, with the potential to unlock over INR 20,000 crore in annual revenue for Indian ports.[24] Estimates suggest that the maritime sector will require investments of INR 5 lakh crore by 2030 and INR 89 lakh crore by 2047 to harness its full potential.[25] Under the Sagarmala Programme, India has identified 839 projects with an estimated investment of approximately INR 5.8 lakh crore. As of April 2025, 272 projects had been completed.[26] Nearly 50 percent of Sagarmala’s total outlay is allocated to port modernisation and new port development.
On 24 September 2025, the Union Cabinet of India approved a comprehensive package of INR 69,725 crore to revitalise India’s shipbuilding and maritime ecosystem. Built around a four-pillar approach, the package seeks to strengthen domestic capacity, improve long-term financing, promote greenfield and brownfield shipyard development, enhance technical capabilities and skilling, and undertake legal, taxation, and policy reforms to create a robust maritime infrastructure.[27]
Six new mega ports are planned across the country, including Vadhavan (Maharashtra), Enayam (Tamil Nadu), Sagar Island (West Bengal), Paradip Outer Harbour (Odisha), Sirkazhi (Tamil Nadu), and Belekeri (Karnataka).[28] Galathea Bay in Great Nicobar Island, notified as the 14th major port, is being developed as a transshipment hub. This is expected to raise the share of Indian cargo transhipped through domestic ports from about 25 percent in 2020 to 75 percent by 2030.[29]
India’s current port-handling capacity is projected to increase by over 300 percent to 10,000 Million Tonnes Per Annum (MTPA) by 2047, signalling unprecedented growth.[30] Over the last decade, major ports increased their annual cargo-handling capacity by 87 percent.[31] India is seeking to upgrade the major ports of Paradip, Visakhapatnam, and Ennore to handle up to 300 MTPA each by 2030.[32] Concurrently, India’s inland waterways cargo handling capacity is also planned to be increased by almost four times to 500 MTPA by 2047. India is proactively seeking to attract Foreign Direct Investment (FDI) into the maritime sector. At the Global Maritime India Summit (GIMS) 2023, Finance Minister Nirmala Sitharaman noted that “India’s efforts over the past nine years have transformed the maritime sector, with a remarkable US$4.2 billion in FDI, driving progress in this vital industry.” Expansion of the maritime sector is also expected to generate around 10 million jobs, including four million direct and six million indirect employment opportunities.[33]
To provide a fillip to the shipping industry, the Indian government has approved the establishment of an INR 25,000 crore (US$2.9 billion) MDF in the FY 2025-26 budget. This includes a Maritime Investment Fund of INR 20,000 crore and an Interest Incentivisation Fund of INR 5,000 crore to reduce the effective cost of debt and improve project bankability. This fund aims to provide long-term financing for shipbuilding and ship repair, with the government contributing 49 percent and the remainder mobilised from major port authorities, other government entities, Central Public Sector Enterprises (PSEs), financial institutions, and the private sector.
Furthermore, on 24 September 2025, the Union Cabinet of India approved the Shipbuilding Development Scheme (SbDS) with a budgetary outlay of INR 19,989 crore. The scheme aims to expand domestic shipbuilding capacity to 4.5 million gross tonnage annually, support the development of mega shipbuilding clusters, upgrade infrastructure, establish the India Ship Technology Centre under the Indian Maritime University, and provide risk coverage, including insurance support, for shipbuilding projects.[35] It also seeks to raise the share of Indian-flagged vessels in global cargo volumes to 20 percent by 2047.
This strategic push is central to realising India’s ambition of becoming a US$30-trillion economy by 2047. Notably, the broader financial package of INR 69,725 crore, approved on 24 September 2025 to support shipbuilding and maritime sector development, is expected to generate nearly 30 lakh jobs and attract investments of approximately INR 4.5 lakh crore. Beyond economic impact, these measures are expected to strengthen national, energy, and food security by enhancing the resilience of critical supply chains and maritime routes, while reinforcing geopolitical resilience and strategic self-reliance in line with the vision of Aatmanirbhar Bharat.[36]
Policies such as allowing 100 percent FDI under the automatic route for port and harbour projects, along with a 10-year tax holiday for port development enterprises, have bolstered the sector.[37] Nine Indian ports now feature in the World Bank’s Container Port Performance Index of 2023.[38] India’s ranking in the International Shipment category of the Logistics Performance Index (LPI)[39] has improved markedly, rising from 44th in 2014 to 22nd, while its overall rank stands at 38th. In 2023-24, major Indian ports reduced average container turnaround time to 22.57 hours, exceeding benchmarks set by many global leaders.[40] India also plans to reduce the average container dwell time from 55 hours in 2020 to under 40 hours by 2030.[41] Recently, Mundra Port became the first Indian port to handle over 200 million metric tonnes (MMT) of cargo in a financial year, setting a national benchmark.[42] While this remains modest compared to Shanghai port, which handles close to 700 MTPA annually, the progress is noteworthy.
India is advancing digital transformation across ports and logistics to improve operational efficiency. Key initiatives include AI-based berth allocation and maritime single-window software, targeted for rollout by 2026. Systems such as the e-Samudra online vessel registry and the Online Dredging Monitoring System (Sagar Samriddhi) are already operational at major ports, while a National River Navigation and Traffic System is planned to be set up by 2027. These initiatives, along with the Sagar Manthan platform and the SAGAR-SETU mobile app, provide stakeholders with real-time data on vessels, cargo, finance, and regulatory compliance, thereby promoting ease of doing business.[43]
India is reinforcing its maritime policy framework to boost governance, public-private partnerships (PPP), shipbuilding, and fiscal incentives. The Union Budget had extended the Shipbuilding Financial Assistance Policy (SBFAP) 2.0, providing direct financial subsidies to Indian shipyards with a total outlay of INR 18,090 crore. On 24 September 2025, the Cabinet announced a package under which the Shipbuilding Financial Assistance Scheme (SBFAS) will be extended by another decade, until 31 March 2036, with an enhanced corpus of INR 24,736 crore. The scheme aims to incentivise shipbuilding in India and includes a Shipbreaking Credit Note component with an allocation of INR 4,001 crore. Simultaneously, the National Shipbuilding Mission (NSM) was also approved on 24 September 2025 to oversee the implementation of all policy initiatives.[44]
In the Union Budget of 2025-26, the Government of India had indicated a plan to include large commercial ships in the Infrastructure Harmonised Master List (HML) under the Transport and Logistics category. A notification issued by the Ministry of Finance on 19 September 2025 officially accorded this status, thereby fulfilling a long-standing demand of the shipping and shipbuilding sector. Indian-owned and Indian-flagged commercial ships with a gross tonnage (GT) of 10,000 or more, or Indian-built, owned, and flagged vessels with a GT of 1,500 or more, will now qualify as infrastructure assets.[45]
This enables access to cheaper long-term finance with longer tenors and lower interest costs from banks and specialised infrastructure lenders.[46] It also facilitates large ships being used as collateral, facilitates overseas borrowing and viability gap funding, and provides tax benefits. This measure aligns with the Maritime India Vision 2030 and aims to expand India’s Indian-flagged tonnage while strengthening domestic shipbuilding capacity. Shipyards have held infrastructure status since 2016, and customs duty exemptions are already available on shipbuilding spares.[47]
Policy measures are also prioritising financial assistance for shipbreaking and tonnage-based tax benefits for inland vessels, rather than profit-linked incentives, to promote inland waterways and coastal trade. In parallel, efforts are underway to raise the share of cargo handled at major ports through PPPs or other operators from 51 percent in 2020 to over 85 percent by 2030.
While there is no new standalone national “Ship Repair Policy” document yet, the framework explicitly includes ship repair as part of the maritime industrial ecosystem. Indian shipyards are required to have a ‘Right of First Refusal’ for ship repair contracts by government departments or PSUs, just as for shipbuilding, to build domestic capability. Efforts are underway to expand repair infrastructure and attract global commercial ship repair work into India, thereby reducing foreign dependency and turnaround times. State governments such as Maharashtra, Gujarat, and Andhra Pradesh are launching state-level shipbuilding and repair incentives that include land support, financial grants, and cluster development. [48]
Another innovative scheme announced in the budget is the Shipbreaking Credit Note scheme.[49] It incentivises ship scrapping by issuing a credit note equivalent to 40 percent of the scrap value, which can be redeemed towards the purchase of new Made in India ships. The budget has also provided for the development of shipbuilding capability, including design, research and development (R&D), and training centres, with financial support. In addition, support for External Commercial Borrowings (ECBs) is being encouraged to bridge funding gaps.
Parliament cleared five maritime legislations during the 2025 Monsoon Session, marking the most comprehensive overhaul of India’s maritime framework in over a century. Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal stated that these reforms would strengthen the Blue Economy, enhance trade efficiency, and align Indian shipping with global standards. The following are the five bills:
Shipbuilding and Recycling. India is making strategic moves to bolster its presence in shipbuilding and ship recycling, with plans to add 1,000 vessels by 2047 through a new shipping company co-owned by the government, PSUs, and foreign partners.[51] Domestic demand channelisation for shipbuilding and development of common platforms for ancillary and marine design ecosystems are being actively looked at, along with promoting waste-to-wealth initiatives through increased scrap usage in the Steel industry. Five shipbuilding and repair Clusters are planned in coastal states, supported by financial and regulatory incentives. Foreign collaboration, notably with Japan and South Korea, is being pursued for technology transfer and capacity enhancement. Globally, India ranks second in ship recycling, with a 33 percent share, and aims to improve the global ranking to 1 by 2030.[52]
Inland Waterways Augmentation and Growth. Development of inland waterways and coastal shipping is receiving sustained policy attention to reduce dependency on road and rail transport, which currently account for 66 percent and 31 percent of fright movement, respectively. This effort aims to lower logistics costs, traffic congestion, and pollution. Over 5,000 km of navigable waterways are under development, with plans to operationalise six new National Waterways and a further 26 identified for development. The Jal Marg Vikas Project by the Inland Waterways Authority of India (IWAI) with assistance from the World Bank, covers key projects on Ganga, Brahmaputra, and Mahanadi rivers. Ro-Ro and ferry services for passengers and cargo are also being expanded.[53] India has increased the modal share of cargo by Inland Waterways (IW) from 0.5 percent to 2 percent, recording 19 percent year-on-year growth in cargo volumes over the last 5 years, with a target of 5 percent by 2030.[54] As a part of digital solutions, the CAR-D (Cargo Data) web-based portal is being used for the collection, analysis, and public dissemination of IW cargo and passenger data. By 2035, coastal shipping’s modal share is expected to grow from 6 to 33 percent, reflecting the robust potential for economic expansion.[55]
Figure 2 depicts the growth of Indian Inland Waterways capacity from 2015 to 2050.
Figure 2: Growth of Inland Waterways Capacity (2015-2050)
Source: Inland Waterways Authority of India (IWAI); Ministry of Ports, Shipping and Waterways, based on IWAI Annual Reports, Maritime India Vision 2030, and National Waterways traffic projections.[56]
Promoting Ocean, IW, and Coastal Cruise Sector. The Cruise Bharat Mission (CBM), launched in September 2024, aims to position India as a cruise tourism hub by strengthening policy coherence and inter-ministerial coordination. A priority is the development and operationalisation of ferry and cruise terminals. Various cruise training academies have also been established across the country, including through private participation. Under CBM, India aims to double sea cruise passenger traffic to 10 lakh and expand river cruise passenger traffic more than tenfold to 50 lakh by 2047.[57]
Green Shipping Initiatives. India’s long-term maritime strategy places sustainability and decarbonisation at its core. According to the Review of Maritime Transport 2025 by the United Nations Conference on Trade and Development (UNCTAD), India handles over 95 percent of its trade by volume through shipping and accounts for about 2.4 percent of global shipping emissions.[58] Policy initiatives like the National Green Hydrogen Mission (2023-30), Harit Sagar Guidelines (2023-30), Green Tug Transition Programme (GTTP) (2024-30), and emerging green shipping corridors have set ambitious targets, including 23 percent renewable energy use at ports and participation in 25 zero-emission routes globally by 2030. Achieving these goals will require careful balancing of ambition and execution, with investment needs estimated at INR 2.11 lakh crore. Ports like Kandla and Tuticorin are operationalising green hydrogen plants and bunkering infrastructure to support cleaner fuels. Major ports are also scaling up solar and wind installations to reduce operational carbon footprints, though progress will depend on sustained capital infusion and effective monitoring.
National Green Shipping Policy (NGSP) and transition challenges. A consultative draft of the National Green Shipping Policy (NGSP) has been prepared by the Directorate General of Shipping (DGS) in collaboration with industry stakeholders. The transition to green shipping is being driven through Harit Sagar Green Port Guidelines. Plans include the development of five Green Hydrogen/Ammonia hubs and the deployment of over 1,000 green vessels by 2029. The Green Tug Transition Program (GTTP) targets the complete shift of harbour tugs to clean energy by 2040, while the Harit Nauka Guidelines aim for 100 percent green fuels in inland vessels by 2045.[59]
While these initiatives are well conceived, they remain largely port- or harbour-centric and need to be complemented by transition pathways for ocean-going vessels across categories such as bulk carriers, container ships, and tankers. The alternative fuel ecosystem also remains at a conceptual stage, with scale-up contingent on clarity around fuel availability, quantity, costs, safety standards, and training frameworks. Risk-sharing mechanisms would need to be looked at to provide impetus to the greening efforts. Technology sharing, absorption, and capacity-building—particularly in coordination with first movers—will be essential. In this context, India has pursued partnerships with Denmark, Norway, Singapore, South Korea, and Japan. Events like the ‘Green Shipping Conclave 2025’[60] held in India in February 2025 facilitate such initiatives and can prove to be crucial in this direction.
The numbers of Indian seafarers have almost tripled over the last decade. As of 2025, India has over 300,000 trained seafarers, up from 103,000 in 2013, and ranks third globally—after the Philippines and China—with a 12-percent share of the world's seafaring workforce (1.9 million total). Under Maritime India Vision 2030 and Amrit Kaal 2047, the growth targets a 20-percent global share by 2030 and aims to position India as the largest supplier by 2055, potentially exceeding 500,000 seafarers to support a blue economy contributing 12 percent to GDP.[61] Existing training and skilling mechanisms include the DGS approved programmes at Indian Maritime University (IMU) and over 100 institutes offering Standards of Training, Certification and Watchkeeping for seafarers (STCW)-compliant training, alongside Skill India-linked courses for ratings and officers. Improvement plans focus on expanding facilities to enable meeting of targets.
Figure 3: India’s Seafarers Population Growth (2000-2050)
Source: Directorate General of Shipping; Ministry of Ports, Shipping and Waterways; Maritime India Vision 2030; Amrit Kaal Vision 2047, based on official seafarer statistics and long-term projections.[62]
Note: The chart illustrates the projected growth in India’s seafarer population, particularly driven by the MAKV 2047
PM Gati Shakti Initiative. This is India’s National Master Plan for multimodal connectivity. It is a Geographic Information System (GIS)-enabled digital platform launched by the Prime Minister on 13 October 2021 to harmonise infrastructure planning across seven economic ‘engines’: rail, road, ports, waterways, airports, mass transit and logistics.[63] It brings central ministries, states, and implementing agencies onto a single digital map to cut bottlenecks, speed up approvals, and coordinate investments. By mapping port-hinterland links (road/rail/inland waterways), coordinating project schedules and financing, and integrating platforms such as the Unified Logistics Interface Platform (ULIP) and Sagarmala, GatiShakti aims to reduce turnaround times and modal breaks that raise shipping costs. With an INR 100 lakh crore investment corpus, it aims to reduce logistics costs from 14 percent to 9 percent of GDP by 2030, aligning these costs with those of the developed economies. It also aims to strengthen coastal shipping and inland water transport as competitive alternatives to road transport.
Gati Shakti’s data-driven approach is extendable to offshore planning (platforms, wind, hydrogen/bunkering hubs, marine clusters), helping streamline clearances, risk mapping and whole-of-government investment for blue-economy projects. Recent processes have formalised these offshore linkages to support sustainable offshore development, lower logistics costs, accelerate project delivery, increase port throughput, enhance modal shift to coastal/inland shipping, and improve investor confidence for shipbuilding, repair and marine industry clusters.[64] The success of the initiative depends on timely state-level implementation, data quality across agencies, coordinated financing, better training, smooth absorption of technology, and environmental/social safeguards for coastal projects, along with the ability of stakeholders to work beyond their silos.
National Maritime Heritage Complex (NMHC). The NMHC is a flagship cultural, educational, and tourism project being developed near Lothal in Gujarat. It is designed to showcase India’s 4,500-plus years of maritime history and heritage, from ancient seafaring in the Indus Valley Civilisation to modern naval and oceanic traditions. The complex will include maritime museums, theme parks, recreation and eco-resort areas, state pavilions, research and training facilities, and immersive galleries depicting India’s maritime evolution. It would house the largest maritime museum in the world under the aegis of the Sagarmala Programme and is expected to attract 25,000 daily visitors.[65]
The construction of Phase 1 A (museum with six galleries) is underway and currently at 60-80 percent progress, with completion expected in 2026. Phase 1B (eight galleries of the museum complex, the world’s tallest lighthouse museum, and garden areas) and Phase 2 (the hospitality zone, 4 theme parks, amusement parks, and a maritime research institute) of the complex are likely to be undertaken progressively, as per approved plans, though no firm timeline has been indicated at the time of writing. On 21 December 2025, India signed an MoU with the National Maritime Museum in Amsterdam, Netherlands for professional cooperation on curation and technical design of this world-class facility. NMHC will help to enhance consciousness about our maritime heritage and culture, apart from creating about 22,000 jobs.[66]
India’s maritime development roadmap covering shipbuilding, ports, inland waterways, and the associated ecosystem is clearly articulated and examined in this paper. However, challenges remain across finance, regulation, skilled labour availability, technology adoption, and pollution control. Limited access to financing from banks and financial institutions continues to deter private sector participation. While the INR 25,000 crore MDF is intended to ease capital constraints for shipowners, its effectiveness will depend on the timely mobilisation of the remaining 49-percent stake beyond the government’s committed share. Delays in this regard could raise concerns about the fund’s sustainability. The PPP model therefore needs to be pursued vigorously, with support from the Government of India. The MoPSW is also examining a PLI option; early rollout will be critical to enable shipbuilders to scale up, failing which India’s stated targets may remain out of reach.
Regulatory reforms are being advanced progressively and with renewed urgency, as reflected in the enactment of five new maritime laws during the recent monsoon session of Parliament. Nevertheless, further steps are required to attract foreign participation and encourage risk-averse domestic entrepreneurs. Operational inefficiencies as a result of outdated port designs, a shortage of skilled labour and shallower depths of water, result in bottlenecks for quick turnaround times and increased cargo volumes. These issues will need to be kept on the radar to ensure that the pace that has picked up recently is not slackened due to complacency or a lack of sustained effort.
Adopting advanced digital technologies, such as blockchain, AI and the IoT, can improve port operations and efficiencies. AI algorithms can forecast port congestion, and digital platforms can streamline cargo handling, customs clearance, and vessel management.[67] Skill and expertise deficits in other areas like green shipping, underwater technology absorption, and specialised port operations also hamper their implementation against desired timelines. Slow transition to low- and zero-emission fuels, with renewable energy in ports at less than 10 percent despite Harit Sagar targets; high retrofit costs (30-50 percent premium) and skill gaps hinder adoption. Creation of a Green Maritime Fund to facilitate amalgamation of concessional finance, improve carbon revenues and private capital for port electrification, LNG bunkering and retrofits needs to be worked out.
The dredging sector in India faces operational challenges such as a lack of standardisation, outdated equipment, inefficient soil investigation, and shortages of trained personnel. These gaps must be addressed as India expands existing port capacities and develops new ones. Apart from this, slow land acquisition processes and bureaucratic delays have added 20-30 percent to Sagarmala project costs.[68] Standardisation of data templates coupled with single-window clearances has to be the way ahead to speed up processes.
India also needs to infuse advanced technology and expertise into the construction of high-quality, environmentally sustainable vessels. Countries such as China, South Korea, and Japan, with their advanced industries, have already acquired a head start and runaway success, making it difficult for the Indian industry to compete. Currently, the EXIM trade in India relies extensively on foreign ships, bringing out the necessity of scaling up. Additionally, an ageing Indian-owned fleet, with numerous ships beyond 20 years old, raises maintenance costs, reduces operational efficiency, and exacerbates environmental concerns. Another area that needs to be looked at is enhancing the capability of Indian shipyards to undertake repairs, overhauls, and defect rectification of ships to global standards. The geostrategic location of India in the Indian Ocean Region (IOR), with the ever-increasing shipping and cruise traffic in this area, presents vast opportunities for profitable utilisation and revenue generation for Indian shipyards.
Foreign-flagged vessels, often registered in tax havens, enjoy easier access to capital, lower borrowing costs, and lenient regulations. Their ownership structures allow them to operate with minimal regulatory oversight, making them far more competitive than Indian-flagged ships. High input costs (especially steel), dependence on imports for spare parts, and delays in vessel deliveries add to the challenges for Indian companies.
In the fisheries sector, unplanned and unscientific exploitation in some areas risks long-term sustainability and impacts marine biodiversity. To mitigate unsustainable fishing, it is important for India to impose stricter regulations and ban harmful and illegal fishing methods. Implementing licensing mechanisms, quotas and real-time technology-enabled monitoring can help prevent over-exploitation. Collaborating with international partners can introduce advanced technologies and expertise to develop various aspects of the Blue Economy, such as sustainable fisheries, renewable marine energy, and eco-friendly tourism practices. Global warming, rising sea levels, ocean acidification, and unexpected weather patterns pose challenges to coastal ecosystems and communities.
Though awareness levels are increasing by the day, pollution from plastics, chemicals, and oil spills continues to adversely affect the environment, with adverse consequences for marine life and the coastal populations. Resistance from local fishermen and businesses also retards developmental activities for large-scale cruise projects due to apprehensions related to the displacement of affected resident communities. Despite these challenges, India’s maritime sector remains positioned for strong long-term growth.
India’s maritime sector is poised to become a pillar in the pursuit of the country’s ambitions to become a developed country by 2047. This reflects the convergence of economic ambition, strategic necessity, and sustainable Blue Economy development. As a trade-dependent economy with a strategic maritime location and a well-endowed peninsular geography, India’s growth trajectory is intrinsically linked to the efficiency, resilience, and security of its maritime domain. Policy frameworks such as Sagarmala, MIV 2030, and MAKV 2047, collectively enable a decisive shift towards integrated, port led development, logistics optimisation, indigenous shipbuilding, and improved maritime governance.
Progress over the recent past has been incremental but deliberate, underscoring the structural and capital-intensive nature of the sector. Recent reforms in port administration, logistics digitisation, green shipping, and maritime finance indicate a calibrated approach that balances growth imperatives with environmental sustainability and strategic autonomy. Significantly, maritime sector development is no longer viewed solely through an economic lens but as a strategic enabler of national prosperity, energy and trade security, economic development and supply chain resilience. The India Maritime Week, held in Mumbai in October 2025, illustrated India’s resolve to foster international maritime partnerships, stimulate growth of Indian shipping, and encourage environmental and financial sustainability initiatives.
In the coming years, outcomes will depend on sustained policy coherence, inter-ministerial and stake holder coordination, mobilisation of long-term finance alongside greater private sector participation and external collaboration. If these elements are effectively integrated with technological innovation and human capital development, the maritime sector can evolve into a resilient, secure, and globally competitive pillar of India’s Blue Economy, and a credible gateway to the realisation of the country’s development goals.
Puneet Kumar Bahl is a former Vice Admiral of the Indian Navy with extensive experience in maritime security, naval operations, and strategic maritime affairs.
All views expressed in this publication are solely those of the author, and do not represent the Observer Research Foundation, either in its entirety or its officials and personnel.
[a] The Blue Economy is defined as the sustainable use of ocean resources for economic growth and livelihood.
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[6]Address by Prime Minister Dr. Manmohan Singh in acceptance of Honorary Degree from Oxford University, July 8, 2005, https://www.mea.gov.in/Speeches-Statements.htm?dtl/2623/Address+by+Prime+Minister+Dr+Manmohan+Singh+in+acceptance+of+Honorary+Degree+from+Oxford+University, accessed April 11, 2025
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[22] This figure is based on historical global merchandise trade volume data and future estimates published by the WTO and the OECD. See WTO, Global Trade Outlook and Statistics (Geneva: WTO, various editions, accessed May 15, 2025); and OECD, Economic Outlook (Paris: OECD Publishing, various editions, accessed May 20, 2025). Projections beyond the forecast horizon reflect author extrapolations derived from WTO trade forecasts and OECD macroeconomic growth scenarios
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[36] MoPSW
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Puneet Kumar Bahl is a former Vice Admiral of the Indian Navy with extensive experience in maritime security, naval operations, and strategic maritime affairs. ...
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