India's defence shipbuilding sector stands at multi-decade transformation threshold: Report
Dec 19, 2025
New Delhi [India], December 19 : India's defence shipbuilding sector is entering a decisive growth phase, driven by a sharp increase in naval capital expenditure, a massive government policy push, and rising strategic imperatives in the Indian Ocean Region, according to a recent institutional research report by PhillipCapital.
"With over Rs 2.3 trillion of projects in various stages of execution or approval, the sector enjoys multi-year visibility across high-value platforms, including destroyers, frigates, corvettes, submarines, fleet-support ships, and aircraft carriers," the report said.
It further highlighted the recently announced Rs 697-billion Shipbuilding and Maritime Development Package, the largest maritime stimulus in the country's history, aimed at transforming India into a top-five global shipbuilding nation by 2047.
The package introduces financial assistance, interest subvention, refund guarantees, and the development of eight coastal shipbuilding clusters to bridge long-standing cost and infrastructure disadvantages vis-a-vis East Asian peers.
As of 2025, India's shipbuilding output is heavily skewed toward defence vessels, ferries, patrol craft, and repair/refit work, with limited participation in large commercial builds.
The country ranks outside the top-15 globally in commercial shipbuilding by tonnage, but maintains a robust defence portfolio with over 60 naval vessels currently under construction, including destroyers, frigates, corvettes, and submarines, the report highlighted.
Naval modernisation is emerging as the sector's strongest growth driver. Fleet procurement spending is expected to nearly triple to around Rs 244 billion in FY26 from Rs 93 billion in FY18, while dockyard and project spending is projected to double over the same period.
Over 60 naval vessels are currently under construction, with another 70-80 planned, spanning destroyers, frigates, submarines, corvettes, and support vessels. The overall naval modernisation pipeline exceeds Rs 2.3 trillion, with 75% of defence procurement reserved for domestic suppliers.
The report further highlighted that the public sector shipyards including Mazagon Dock Shipbuilders, Cochin Shipyard, and Garden Reach Shipbuilders & Engineers are expected to be the primary beneficiaries of this expansion, supported by strong order visibility and rising indigenisation.
Indigenous content in frontline warships has risen sharply, shifting the navy's role from a buyer of platforms to a systems integrator.
The report also highlights a growing export opportunity. Defence exports touched ₹236 billion in FY25, aided by government-backed lines of credit to friendly nations such as Mauritius, Vietnam, and Sri Lanka. Naval platforms and patrol vessels are increasingly seen as scalable export products under India's SAGAR (Security and Growth for All in the Region) doctrine.
