India's defence shipbuilding sector stands at a multi-decade transformation threshold
- IBEF
- December 22, 2025
The shipbuilding or shipyard industry in India’s defence is about to begin a major growth period over several years, due to an increase in capital expenditure, government support, and strategic demands in the Indian Ocean Region, according to an institutional research report done by Phillip Capital. Today, the total value of projects currently being implemented or approved in the shipbuilding/shipyard industry in India exceeds Rs. 2.3 trillion (US$ 27.7 billion). This gives greater visibility over the coming years in respect of high-value ships like destroyers, frigates, corvettes, Submarines, Fleet Support Ships, and Aircraft Carriers. This important impetus has been provided to this Industry, thanks to the recently announced Rs. 697 billion (US$ 8.4 billion) Shipbuilding and Maritime Development Package that aims to establish India among the Top Five Shipbuilding Countries in the world in 2047. This package involves financial assistance, Subsidy in the form of interest subvention, Refund guarantees, and establishing eight coastal shipyard hubs to reduce the cost differentials in comparison to their East Asian rivals.
The biggest drivers of growth have been naval modernization, with the acquisition of naval fleets' expenditure set to touch Rs. 244 billion (US$ 2.9 billion) in FY26 from Rs. 93 billion (US$ 1.1 billion), along with the doubling of dockyard and project expenditures. More than 60 vessels are under construction in the navy, with another 70-80 in the pipeline, and the entire 75% of the defence acquisitions are already being demanded by local vendors. The public shipyards are set to benefit from the soaring levels of indigenization and exports. The defence exports touched Rs. 236 billion (US$ 2.8 billion) in FY25, establishing the rationale for the growth of the Indian marine power in the ever-growing strategic Asia-Pacific belt.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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