The world’s third largest importer of crude oil plans to ship crude oil in Indian-built tankers with a target of more than a hundred home-built vessels over the next 15 years.

The Indian Government has earmarked capital investment of INR850 billion ($10 billion), to build 112 tankers in domestic yards by 2040, according to reports. A first phase would be made up of 79 ships, of which 30 would be medium range (MR) tankers. The first orders could be announced within the next few weeks, sources said, and are likely to be supported by long-term charters to support financing.

The Indian economy currently ranks fifth in the world but is expected to overtake Japan and Germany to become global number three in the near future. However, it relies on foreign-flagged ships, built elsewhere, for most of its imports.      The plans for tankers are similar to the announcement in February by the government to develop Bharat Container Line with a fleet of 100 container ships.

On the tanker front India is heavily dependent on Russian crude, followed by Iraq, Saudi Arabia, and the UAE: MR tankers are well-suited to these relatively short-haul trades. Domestic refining capacity is growing fast. From around 250 million tonnes a year, it is projected to reach 450 million tonnes by 2030. There is barely a nod to  decarbonisation sustainable fuels – it’s a full-blown oil rush.

According to reports in the country’s press, the tanker-building drive will focus directly on domestic shipyards, but joint ventures with overseas shipbuilding groups will be possible. In fact, some observers believe there is no chance that the targets can be met without support from overseas builders. Some even question whether the plans are even achievable on the basis that the far-reaching construction programme has been revealed from what is, effectively, a standing start.

The Indian Government is understood to have approached shipbuilding groups in both Japan and South Korea to sound them out for possible joint ventures.