India Launches Own Oil Tanker Fleet to Slash $8 Billion in Charter Costs, Says Hardeep Puri

India is gearing up for a significant change in its energy shipping strategy. The country plans to build its own fleet of oil tankers to cut down on the high costs currently paid to international operators. Union Petroleum and Natural Gas Minister Hardeep Singh Puri shared this vision during the India Maritime Week 2025 in Mumbai.

Right now, India’s three main oil companies—Indian Oil, Bharat Petroleum, and Hindustan Petroleum—spend around $8 billion over five years renting foreign ships. This amount could cover the creation of a whole new fleet of crude oil tankers. Despite oil and gas making up nearly 28% of India’s trade by volume, only about 20% of this is transported by Indian-owned vessels.

Puri explained, “This challenge we are now turning into an opportunity,” highlighting the plans to enhance India’s maritime capabilities.

India relies heavily on imports for its energy needs, taking in about 88% of its crude oil and 51% of its natural gas from abroad. The cost of importing crude oil alone surpassed $150 billion in the last fiscal year. Freight charges are a big part of this expense. For instance, Indian companies pay around $5 per barrel for crude from the U.S. and about $1.2 per barrel for crude from the Middle East. These shipping costs can reach as high as 15% for liquefied natural gas from the U.S.

Currently, India’s oil firms operate a fleet of around 70 chartered vessels, including Very Large Crude Carriers (VLCCs) and Suezmax ships. The government is exploring various initiatives to reduce this dependence on foreign shipping. This includes consolidating cargo demand for long-term contracts with Indian carriers and creating a Maritime Development Fund to provide affordable financing for vessel purchases.

The urgency of this shift is backed by seismic changes in oil demand. According to projections, the Oil and Natural Gas Corporation (ONGC) will need close to 100 offshore vessels by 2034. In FY 2024-25, India imported about 300 million metric tonnes of crude oil, pointing to the scale of maritime activity in the energy sector.

Under Prime Minister Narendra Modi’s leadership, India has seen a transformation in its maritime infrastructure. Port capacity has increased significantly, nearly doubling from 872 million tonnes in 2014 to 1,681 million tonnes today. Cargo volumes also rose from 581 million tonnes to approximately 855 million tonnes, while the time it takes to turn around ships at ports has improved by 48%.

Indian shipyards are prepared to support this growth. Noteworthy collaborations, like those between Cochin Shipyard and companies like L&T and Daewoo from South Korea, are bringing cutting-edge technology to local yards. There’s a strong focus on building vessels that meet international standards.

As Puri put it, “We are not only making in India—we are preparing to sail for the world.” Looking ahead, the maritime sector could attract up to $95 billion in investments and create 15 million new jobs by 2047 as India aims to become a developed nation.

India’s strategic location in emerging trade routes will also play a role in its maritime ambitions. Initiatives like the India-Middle East-Europe Economic Corridor aim to connect Indian ports to Europe and Africa, reinforcing the idea that seas can be bridges to a brighter future.

India Maritime Week 2025 has gathered participants from over 100 countries, featuring 500 exhibitors and countless delegates, underlining the global significance of this moment in maritime trade.

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Oil tankers, Maritime strategy, Freight costs, Hardeep puri, Energy shipping, Crude oil, Natural gas, Energy import, Maritime capabilities, Hindustan petroleum, Bharat petroleum, Indian oil corporation, Very large crude carriers