Another Hyundai heads for India. Why it's important
Hyundai
company, which is eyeing India, sets up shop in the country, it can provide a big push to India's growth story.
HD Korea Shipbuilding
& Offshore Engineering Co. Ltd. (
KSOE
), a subsidiary of HD Hyundai Co., Ltd. (which is part of the larger Hyundai conglomerate that also includes car company Hyundai Motors), has signed a Memorandum of Understanding (MoU) with Cochin Shipyard Limited. More than a business agreement, it signals a bold new phase in India's maritime ambitions.
A strategic partnership for capability building
India currently accounts for less than 1% of the global shipbuilding market. Yet, it has laid out ambitious targets: to break into the top 10 shipbuilding nations by 2030 and secure a place among the top 5 by 2047. The CSL–KSOE MoU is central to this strategy.
by Taboola
by Taboola
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While Cochin Shipyard is one of India's leading shipyards, its capabilities are largely limited to building small to mid-sized commercial and defense vessels. By joining hands with KSOE, a global shipbuilding powerhouse, India will gain access to advanced ship design, automation, eco-friendly technologies and project execution expertise. This collaboration is expected to fast-track the development of large-scale shipbuilding capacities that India currently lacks.
Moreover, this partnership includes knowledge sharing and technical support that will directly contribute to upgrading India's maritime workforce and infrastructure. Similar to how Maruti Suzuki catalyzed the Indian automobile industry by introducing Japanese technology and practices, this MoU aims to trigger a similar transformation in shipbuilding.
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Why HD Korea is interested in India
For HD Korea, the Indian partnership is a strategic move to diversify and expand its global footprint beyond East Asia. With rising costs in South Korea and space constraints at its own shipyards, India offers an attractive alternative -- a large pool of skilled labor, growing infrastructure and strong government support.
India's geographical advantage also plays a role. With a long coastline and proximity to major global trade routes, Indian ports are ideal for shipbuilding, ship repair and ship recycling. The Indian government is actively developing maritime industrial clusters in Gujarat, Tamil Nadu and Andhra Pradesh, supported by subsidies, infrastructure funding and policy reforms. This kind of ecosystem is appealing to foreign shipbuilders seeking long-term investment destinations. KSOE is particularly interested in India's potential to become a hub for green shipbuilding and retrofitting, as the global demand for cleaner vessels surges under new environmental regulations. India's green policy support, ranging from credits for ship recycling to grants for low-emission vessel construction, makes it a timely and strategic partner for KSOE.
India's evolving shipbuilding policy
The partnership fits squarely within the framework of India's Maritime India Vision 2030 and Amrit Kaal Vision 2047, which outline a comprehensive roadmap for developing India's maritime economy. These policies emphasize not only shipbuilding but also port development, logistics improvement and coastal economic zones. To support these ambitions, the Indian government has set up financial incentives, including a Rs 25,000 crore Maritime Development Fund. Under the Shipbuilding Financial Assistance Policy, builders are eligible for grants covering up to 30% of the construction cost, especially for green and advanced vessels. Shipowners who recycle old ships in India can also earn credit notes for constructing new ones—a circular incentive to stimulate local shipyards. In addition, India is simplifying procedures for Indian-flagged vessels and prioritizing them in government contracts, aiming to boost domestic demand for ships built and operated in India.
Why India needs its own ships
India's reliance on foreign vessels is one of its biggest logistical vulnerabilities. Over 95% of its trade by volume moves through ships, yet less than 6% of this is carried on Indian-flagged vessels. Most of its cargo moves on foreign ships, which costs the country billions of dollars in freight payments annually and exposes it to logistical risks during global disruptions. In addition, nearly half of India's existing merchant fleet is over 20 years old. This aging fleet needs urgent modernization, not just for efficiency, but also to meet global environmental standards.
Owning and operating more Indian ships will also provide a reliable, cost-efficient
shipping
backbone to support the government's manufacturing and export goals under initiatives like Make in India and Atmanirbhar Bharat. A strong domestic shipping line ensures that India controls the movement of its own goods and can maintain supply chain resilience even during geopolitical or economic turmoil. Bharat Container Line, a national container shipping line being planned by the government, is expected to reduce dependence on foreign-flagged vessels and strengthen India's control over foreign trade.
Shipping is the hidden engine behind any successful manufacturing and export economy. China's share of the $150 billion global shipbuilding industry has expanded to over 50% from around 5% in 2000, largely aided by government subsidies, while once dominant US shipbuilders have seen their share dwindle below 1%. South Korea and Japan are the next biggest shipbuilders. To reach its $5 trillion GDP target, India must be able to move goods quickly, cheaply and reliably. Building its own ships, operating its own fleet and controlling its shipping routes will be essential in reducing foreign exchange outflows, lowering transport costs and increasing trade competitiveness.
The shipbuilding sector also generates significant employment and has a high multiplier effect. For every ship built, there is demand created in steel, electronics, machinery, logistics and services. The long-term plan is not just to build ships for India, but to become a global destination for international shipping orders.
(With agency inputs)
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