India’s State Oil Refiners to Buy $600M Tankers Domestically
India’s major state-run oil refiners—Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL)—are joining forces to issue a joint tender later this year for 10 domestically built medium-range (MR) tankers, with a total estimated value of around $600 million. This strategic move underlines the government’s ambition to enhance domestic shipbuilding and reduce dependence on chartered vessels.
The 50,000–60,000 deadweight ton (dwt) vessels, expected to be delivered by 2028, will be constructed at Indian shipyards. Although the country has about 40 shipbuilding yards, only four currently possess the infrastructure to build vessels of this size and complexity. The refiners hope this initiative will boost these facilities’ capabilities and establish India as a competitive player in the global maritime sector.
In the proposed arrangement, IOC plans to commission six of the vessels, while BPCL and HPCL will each acquire two. The initiative represents a departure from the industry norm, as refiners typically lease tankers rather than owning them—leasing is considered more cost-effective. However, officials from these companies have approached the government seeking subsidies or financial incentives to support the purchase and operational costs of the new fleet.
This tanker acquisition aligns with India’s broader “Make-in-India” and shipbuilding promotion policies aimed at fostering self-reliance in strategic infrastructure. Strengthening domestic capacity to build and own tankers can help India secure its energy logistics and support industrial growth. The investment is also expected to stimulate employment across shipyards, ancillary suppliers, and related sectors.
Experts and stakeholders note that while relying on domestic yards may initially involve higher capital costs, it could pay dividends in the long run through developed infrastructure, reduced chartering dependence, and potential for export orders. A successful rollout may also encourage private-sector participation in future projects, both in commercial and defense maritime domains.
The planned tender is anticipated to spark competition among capable Indian shipyards and could serve as a reference model for future state-backed maritime procurement. Delivering the tankers by 2028 will require coordination between refiners, shipbuilders, and government agencies.
