Indian-made oil tankers would allow India to lower its dependence on foreign ships and insurance firms while reducing the risk of sanctions in war-like situations from impacting operations.
Subhash Narayan, Rituraj Baruah
Published11 Jul 2024, 06:00 AM IST
The move is line with the government’s ’Atmanirbhar Bharat’ agenda that aims to develop India’s manufacturing sector.(Bloomberg)
New Delhi: the Union ministry of shipping has proposed a joint venture between state-run Shipping Corporation of India (SCI) and a public sector oil marketing company for manufacturing very large oil tankers, said three people aware of the development.
Indian Oil Corporation Ltd (IOCL), the largest OMC and refiner in the country, is being considered as the preferred entity for forging the joint-venture with SCI.
India currently has less than 1% share of global shipbuilding market
India, which has never made an oil tanker, currently has less than 1% share of the global shipbuilding market, which is dominated by China, South Korea and Japan.
The move is line with the government's 'Atmanirbhar Bharat' agenda that aims to develop India's manufacturing sector. It will also ensure energy security as indigenous very large crude containers (VLCCs) or oil tankers would allow India to lower its dependence on foreign ships and insurance entities while reducing the risk of sanctions in war-like situations from impacting operations.
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"It is felt that all the key aspects like leasing, operations and insurance should be handled by Indian companies. The shipping ministry has put in a proposal for developing VLCCs in the country with joint venture between SCI and an oil company," said one of the three people mentioned above, adding that the proposal is being considered by stakeholders, including the ministry of petroleum and natural gas.
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Another person said that although the proposal is on the table for consideration, it is at an early stage and would need time for taking a concrete shape.
"The infrastructure for building these large VLCCs would also be required to be set up in the country," said the second person.