Government aggregating PSUs' demand to ensure long-term charters for Indian carriers

Mumbai: The government is aggregating PSUs' cargo demand to ensure long-term charters for Indian carriers to reduce recurring cost of crude oil imports , Union Minister for Petroleum and Natural Gas Hardeep Singh Puri said on Wednesday.

Addressing 'India Maritime Week 2025', Puri further said that the government is also advancing the ship owning and leasing entity model to boost domestic ownership.

"Oil marketing companies use vessels for crude imports. To reduce recurring cost through ownership of vessels (ships), we are aggregating PSU cargo demand to ensure long-term charters for Indian carriers, advancing the ship owning and leasing entity model to boost domestic ownership, establishing a maritime development fund, launching shipbuilding financial assistance," he said.

Puri noted that energy and shipping are inseparable pillars of the economy and suddenly India's energy sector is looking for vessels and there are only 2-3 countries (China, Japan and South Korea) which have that capacity to build ships.

"If you talk to them, their order books are filled for the next 6 years...most sensible course of action for us would be to tell them to come here and invest, may be few vessels could be build in Japan, South Korea.

"And then you start production here all this requires prospective planning for 10-15 years," he said.

The minister noted that earlier ship building was disbursed among many countries, which is not the case now.

"We have underestimated the importance of India's external sector and shipping sector. Whenever India's maritime strength has risen both the nation and world has gained," he said.

Puri pointed out that in the coming two decades, 25-30 per cent of the increase global energy demand of energy will come from India.

"The oil and gas sector alone accounts for 28 per cent of India's trade by volume. And out of this entire trade only 20 per cent of cargo was carried by India-flagged and India-owned vessels that is why we need to build more ships" he said.

According to him, when he took charge as Minister of Petroleum and Gas 4.5 years ago, India was consuming 5 million barrels of crude in a day, which rose to 5.6 million barrels of crude in day now.

"India's demand of LPG, crude oil and ethane is rising rapidly. The rate at which we are growing, I think we will be consuming 6 million barrels of crude oil every day," he said.

India imports 88 per cent of its crude oil and 51 per cent of its gas requirement.

Puri said India now supplies 12 per cent of global seafarers.

He also said that the size of the Indian economy is USD 4 trillion and 50 per cent of GDP comes from exports and external sector.

The minister also noted that India is anchoring trade of the 21st century.

"India-Middle East-Europe Economic Corridor (IMEC) will connect our ports to Europe and America," he said.

The minister also said that India's maritime sector is poised to attract USD 8 trillion by 2047. "Our shipyards are ready for the new era. This is India's moment to energize our oceans." Ports, Shipping and Waterways secretary Vijay Kumar said the maritime sector remains the lifeline of the Indian economy. About 95 per cent of India's trade by volume and 70 per cent by value move by sea, Kumar said.

He noted that the government is strengthening India's shipyards and bridging financial gap by Maritime Development Fund.

"We are focusing on creating shipbuilding clusters. We are talking to the states governments to identify land for building shipbuilding clusters. Andhra Pradesh, Odisha, Gujarat have shown interest in attracting companies for building ships in their states," he added.

Kumar said that the government has aggregated demand of 180 vessels and additionally 200 vessels will be acquired by SCI soon.