India eyeing Bangladesh’s top spot with perks for recycling dying ships

India plans to roll out Rs. 4,000 crore (US$ 454 million) in incentives over 10 years from 2026 to boost its shipbreaking industry and reclaim market share from Bangladesh and Pakistan, according to sources. The proposal, expected to receive cabinet approval by the end of September 2025, includes a credit note worth about 40% of a ship’s scrap value for owners dismantling their obsolete vessels in India. These notes, valid for three years, can be combined or sold and used to buy ships built domestically. The scheme is designed to strengthen India’s position in the global ship recycling market, where it held a one-third share in 2023, compared to Bangladesh’s 46%.
The world’s largest ship graveyard at Alang in Gujarat currently handles 98% of India’s shipbreaking business. However, rising competition from Bangladesh and Pakistan has eroded its dominance. To attract more business, the government is also considering setting up a shipbreaking facility on the East Coast. In addition, a Rs. 25,000 crore (US$ 2.84 billion) Maritime Development Fund, announced in the Union Budget for 2025-26, is set for approval this month to encourage shipbuilding and reduce reliance on foreign-built vessels. The measures come as global shipping dynamics shift, and shipowners look to scrap ageing fleets amid higher freight rates and geopolitical changes.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.