With an aim to strengthen the country’s maritime capacity for energy transportation amid the rising crude and gas import requirements increase pressure on shipping infrastructure, the union government has announced a set of policy measures. Union Petroleum and Natural Gas Minister Hardeep Singh Puri has outlined the initiatives recently.
“India currently consumes about 5.6 million barrels of crude oil per day, compared to 5 million barrels four and a half years ago. At the present rate of growth, the country will soon reach 6 million barrels per day,” said Puri. He shared that according to the International Energy Agency, India is expected to contribute nearly 30 percent of the global rise in energy demand in the next two decades, an increase from the earlier estimate of 25 percent. He added that this growing energy requirement will naturally increase India’s need for ships to move oil, gas, and other energy products across the world.
The Minister informed that during 2024–25, the country imported around 300 million metric tons of crude and petroleum products and exported about 65 million metric tons. The oil and gas sector alone accounts for nearly 28 percent of India’s total trade by volume, making it the largest single commodity handled by ports. He said that India currently meets about 88 percent of its crude oil and 51 percent of its gas needs through imports, which shows how important the shipping industry is for the country’s energy security.
The freight cost forms a significant part of the total import bill. Oil marketing companies pay around 5 dollars per barrel to transport crude from the US and about 1.2 dollars from the Middle East.
He explained that the freight cost forms a significant part of the total import bill. Oil marketing companies pay around 5 dollars per barrel to transport crude from the US and about 1.2 dollars from the Middle East. Over the last five years, Indian PSUs such as Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) have spent nearly 8 billion dollars on chartering ships, an amount that could have built a new fleet of Indian-owned tankers.
Puri pointed out that only about 20 percent of India’s trade cargo is carried on India-flagged or India-owned vessels. He said this presents both a challenge and an opportunity for India to increase its ship ownership and manufacturing capacity. The government is working on steps like aggregating PSU cargo demand to give long-term charters to Indian carriers, advancing the Ship Owning and Leasing (SOL) model, setting up a Maritime Development Fund for affordable vessel financing, and implementing Shipbuilding Financial Assistance Policy 2.0 with higher support for LNG, ethane, and product tankers.
