India is planning to invest between ₹20,000 crore and ₹25,000 crore over the next decade to modernise Gujarat's Alang ship recycling cluster, with the aim of increasing the country's share of the global ship recycling market from 35.4% to nearly 50%,
according to a report by Mint.
The proposed investment is intended to expand Alang's capacity, upgrade infrastructure and make the world's largest ship recycling yard globally competitive while meeting international environmental and safety standards, people familiar with the matter told Mint.
India Emerged as Top Ship Recycling Nation in 2025
The plan builds on India's recent gains in the sector.
According to the Union ministry of ports, shipping and waterways (MoPSW), India became the world's largest ship recycling nation in 2025, with its share of global ship recycling increasing to 35.4% from 30.1% in 2024, based on data from the United Nations Conference on Trade and Development (UNCTAD).
The volume of ships recycled in India rose to 2.99MGT (million gross tonnes) in 2025 from 1.86MGT in 2024, an increase of nearly 60%.
The ministry said the achievement enabled India to meet the Maritime India Vision (MIV) 2030 target of becoming the world's leading ship recycling nation five years ahead of schedule.
Union minister for ports, shipping and waterways Sarbananda Sonowal attributed the milestone to policy reforms, industry participation and compliance with international environmental and safety standards.
Capacity Expansion Planned
According to the report, the proposed investment will increase Alang's recycling capacity from the current 4MLDT (million light displacement tonnes) to 4.5MLDT to around 9MLDT through expansion of existing yards and infrastructure upgrades.
The Gujarat government is expected to contribute more than ₹1,000 crore, while the balance will be funded by the Union government and private recyclers.
The proposed investment is in addition to the approximately US$8bn (billion) that the Union government has earmarked for strengthening India's shipbuilding and ship recycling ecosystem. More than one-fourth of this allocation is expected to be used for upgrading recycling infrastructure at Alang.
Projects at Alang will also be eligible for funding under the ₹25,000 crore maritime development Fund (MDF), comprising a ₹20,000 crore investment fund and a ₹5,000 crore interest subvention facility.
Compliance with Global Standards
A key driver of the proposed expansion is the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC), which India ratified through the Recycling of Ships Act, 2019. The convention came into force globally this year, establishing stricter environmental and safety standards for ship recycling facilities.
To help recycling yards comply with the convention, the Union government has released ₹53.5 crore from the ferrous scrap development fund (FSDF), enabling 115 of Alang's 128 plots to become HKC-compliant, shipping secretary Vijay Kumar said.
Industry Seeks Further Reforms
Despite the progress, industry participants believe that capacity expansion alone may not be sufficient to strengthen India's competitive position.
Nitin Kanakiya, partner at Triveni Shipbreakers LLP, told Mint that Alang's capacity utilisation has declined in recent years because recycling yards in Bangladesh and Pakistan remain more cost-competitive.
Industry representatives have also argued that demand for value-added re-rolled steel plates—a key downstream product of ship recycling—has been affected by the Bureau of Indian Standards (BIS) Quality Control Order, 2014. They contend that measures to revive demand for processed steel should accompany the proposed expansion.
Focus on EU Certification
Beyond HKC compliance, the next major objective is certification under the European Union Ship Recycling Regulation (EU SRR), which is mandatory for dismantling many European-owned vessels.
According to Mr Kumar, 34 recycling yards at Alang have applied for EU certification, and inspections have already been completed at three facilities.
India and the European Union reaffirmed their commitment this week to strengthen cooperation on sustainable ship recycling, including facilitating the inclusion of Indian facilities in the EU's list of approved recycling yards, during a meeting between Mr Sonowal and European commissioner for environment, water resilience and a competitive circular economy Jessika Roswall.
The government also said it continues to engage with European authorities to facilitate approvals.
Target of Recycling 1,200 Ships a Year
Officials expect the expansion to increase India's annual ship recycling throughput from about 500–600 vessels to around 1,000–1,200 vessels over the next decade.
Alang alone is projected to recycle nearly 16,000 ships during this period.
To support the sector, the government has operationalised the ₹4,000 crore shipbreaking credit note scheme under the shipbuilding financial assistance policy.
Under the scheme, ship owners receive a credit note equivalent to 40% of the scrap value of a recycled vessel which can be used towards up to 5% of the value of a new vessel built at an Indian shipyard. The first such credit note was issued in May 2026.
The ministry said it continues to engage with the Gujarat Maritime Board, the Ship Recycling Industries Association, global shipping companies, cash buyers, classification societies and international organisations to address operational bottlenecks.
Global Opportunity
According to estimates by the Baltic and International Maritime Council (BIMCO), more than 16,000 vessels are expected to be recycled globally over the next decade, presenting a significant opportunity for India.
Some industry participants also see potential in developing a regulatory framework for the environmentally compliant recycling of ageing sanctioned or 'dark fleet' vessels at Indian yards, subject to robust approval mechanisms, traceability, payment safeguards and environmental standards.
They argue that such a framework could help India strengthen its leadership in the global ship recycling market.
At the same time, global ship owners have emphasised that compliance with HKC and EU SRR standards must be supported by consistently high levels of safety, environmental management, governance and protection of workers' rights.
According to the Mint report, queries sent to several international shipping companies and the Gujarat government regarding the proposed investment roadmap had not elicited formal responses.
While the government has publicly confirmed plans to expand Alang's capacity and strengthen the policy framework for ship recycling, it has not officially disclosed the proposed investment of ₹20,000 crore–₹25,000 crore cited by people familiar with the matter. Together, however, the policy measures and planned investments indicate that India is positioning Alang as the cornerstone of its long-term strategy for sustainable maritime infrastructure and circular-economy-driven ship recycling.
