India's Ports, Ships and Seas
India's Small Shipping Fleet
Why Indian-flagged ships carry only a small share of India's trade, how much India pays foreign shipping lines, and efforts to grow the fleet.
India’s trade is large, but its own shipping fleet is small.
The share
Indian-flagged ships carry only a small share of India’s external trade, often estimated at under 10 percent.
The cost
India pays foreign shipping companies large sums, estimated at tens of billions of dollars a year in freight, which weighs on the current account.
Why the fleet is small
- Higher costs of operating Indian-flagged ships, such as taxes and financing.
- Expensive capital: Indian firms pay more to borrow than global rivals.
- Global competition from giant shipping lines.
Strategic risk
During crises, foreign lines may prioritise other routes or raise prices sharply, as happened in 2020-21 when freight rates soared.
Policy responses
- Subsidies for Indian ships in government cargo tenders (2021).
- A Maritime Development Fund announced in 2025 to provide long-term finance.
- Treating large ships as infrastructure for cheaper loans.
An Indian oil company imports crude on foreign tankers, paying freight to foreign owners. If Indian ships carried more cargo, some of that money would stay at home.
Indian-flagged ships carry only a small share of India's trade.
- Indian ships carry under 10 percent of India's trade.
- India pays foreign lines large freight bills.
- High costs and expensive finance limit the fleet.
- New funds and subsidies aim to grow it.
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