China Controls 71% of Global Shipbuilding. Can India’s ₹69,725 Crore Plan Change That?

Key Takeaways

• China controls over 53% of global ship production. Even countries that do not trade with China must rely on Chinese ships to move their goods worldwide.
   
• India currently builds less than 0.06% of the world’s ships and has now announced a ₹69,725 crore package to build its own shipbuilding capacity.

China Does Not Just Make Goods. It Controls How They Move.

Most people think of China’s economic power in terms of factories and products. But the real control is in logistics. It is there that the ships that carry almost everybody’s trade, not just China’s, are built.

As of 2024, Chinese shipyards accounted for 71% of global shipbuilding orders. 7 of the top 10 shipbuilders by order volume were Chinese, according to Clarksons Research. That means the world’s trade arteries flow through China, even if the contents have nothing to do with the country. 

The long-term risk is plain. China has created dependencies around the world that reduce the resilience of supply chains with its emphasis on shipbuilding and logistics. The country is vulnerable when it loses control of the movement of its goods.

India Carries 95% of Its Cargo on Foreign Ships. Here is why that is a Problem.

By 2025, 95% of India’s cargo will be carried on foreign vessels. This exposes India to freight volatility, geopolitical risks and strategic vulnerabilities.

India currently builds less than 0.06% of the world’s ships. India’s commercial shipbuilding market is valued at approximately $1.1 billion in 2024, which is less than 1% of global output. 

The Union Cabinet approved a ₹69,725 crore package to revitalise India’s shipbuilding sector recognising this gap. The package is projected to generate nearly 30 lakh jobs and attract ₹4.5 lakh crore in investment.

India’s shipping secretary, T.K. Ramachandran, stated clearly, “We want to be able to build our own ships, flag them here. We think this plan will not only be commercially sensible but also strategically sound.”

What Experts Are Saying and What Needs to Change?

Experts point to a structural problem. “China’s dominance is underpinned by a variety of upstream industries, in particular its steel production. It makes it very hard for other countries to offer something similar,” says Peter de Langen, shipping economist, cited by CKGSB Knowledge.

The US government reached a similar conclusion. The US Trade Representative’s Section 301 investigation found that “China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance is unreasonable and burdens or restricts US commerce.” 

US lawmakers John Moolenaar and Raja Krishnamoorthi called it “the same playbook we have seen in semiconductors and solar: massive subsidies and anti-competitive tactics.”

For India, the path forward involves partnerships. 

Cochin Shipyard in Kerala is exploring a partnership with a South Korean company. These joint ventures aim to bring access to the latest technology and global markets. The Shipbuilding Financial Assistance Scheme has been extended until March 2036 with a corpus of ₹24,736 crore, offering long-term, predictable support.

Conclusion

China’s grip on global shipping is not just about trade. It is about control over the entire movement of global goods. For India, the ₹69,725 crore shipbuilding push is a start. But closing the gap requires consistent policy, skilled labour, and technology, which takes years to build. Until then, even non-Chinese trade will continue to sail on Chinese ships.

FAQs

Why is China the dominant player in the world shipbuilding industry?

China’s dominance in global shipbuilding can be traced back to the establishment of a strong ecosystem of shipyards, steel production, logistics, and government support. China is the world’s biggest shipbuilder and Chinese shipyards won 71% of global shipbuilding orders in 2024.

Why is China’s dominance in shipbuilding a threat for countries such as the US and India?

China’s dominance has contributed to a world that relies on ships built by China for trade. That can present economic and national security risks, experts and policy makers warn, because a disruption in China’s shipbuilding or logistics sector could have a ripple effect through supply chains, pushing up freight costs and affecting the movement of goods worldwide.