Indian Oil- NIIF Mull Joint Ownership of Crude Oil Tankers in Boost to Domestic Shipbuilding
14 July 2025 | New Delhi
In a move that could significantly bolster India’s domestic shipbuilding industry, state-run oil refiner Indian Oil Corporation Ltd (IOC) and the quasi-sovereign National Investment and Infrastructure Fund (NIIF) are in early discussions to jointly own crude oil tankers. The initiative is part of a broader government strategy to encourage public sector oil companies to commission vessels from Indian shipyards, aiming to catapult the country into the top five global shipbuilding nations by 2047.
“The discussions are in the early stage,” confirmed a person with direct knowledge of the developments, indicating that while nothing has been finalised, the momentum is building in the direction of long-term collaboration in the maritime infrastructure space.
Last week, IOC—one of India’s elite Maharatna public sector undertakings—and NIIF signed a strategic Memorandum of Understanding (MoU) to jointly explore multiple investment opportunities. Among the four priority areas identified in the agreement, maritime infrastructure stands out, aligning closely with the government’s ambition to revitalise India’s shipbuilding capabilities.
When contacted, NIIF did not respond to queries regarding whether the strategic partnership will evolve into a ship-owning venture. Indian Oil Corporation also did not provide an immediate comment.
According to a source familiar with the planning, the Ministry of Petroleum and Natural Gas is expected to designate Indian Oil Corporation as the nodal agency to lead efforts in ordering a fleet of Medium Range (MR) crude oil tankers. These tankers, typically sized between 25,000 and 45,000 deadweight tonnage (DWT), are vital for coastal and regional oil transport.
IOC is likely to float an Expression of Interest (EoI) soon for the construction of 10 MR tankers to be built at domestic shipyards. The proposed order will cover not only IOC’s needs but also those of other state-run oil firms including Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL). The nodal agency arrangement is designed to streamline procurement, negotiations, and contracting with Indian shipyards, making it easier to implement and manage large-scale fleet acquisition programs.
The tanker acquisition proposal is part of a concerted national strategy to strengthen India’s industrial self-reliance and global competitiveness in shipbuilding. The effort is backed by policy nudges and fiscal support mechanisms from the central government, which views the maritime sector as a key enabler of India’s long-term economic and strategic interests.
India currently ranks well below major shipbuilding nations like China, South Korea, and Japan. However, government officials believe that with coordinated efforts involving state-owned enterprises, public-private partnerships, and investments in maritime infrastructure, the country can become a top-five shipbuilding power within two decades.
The move to push public sector oil firms to place ship orders locally is seen as a foundational step in building long-term capacity and attracting private investment into shipyards that have long struggled with under-utilisation and global competition.
NIIF, which functions as India’s sovereign-backed fund for infrastructure investment, has been actively looking to diversify its portfolio across logistics, energy, transport, and digital sectors. Maritime infrastructure fits squarely within NIIF’s strategic outlook, and a potential co-ownership of oil tankers with IOC would mark a first-of-its-kind investment collaboration in the shipping domain.
Such a model could pave the way for other state-run enterprises to follow suit, combining institutional capital with operational expertise to achieve both economic and strategic goals.
If the current discussions bear fruit, the IOC-NIIF partnership could not only boost India’s self-reliance in energy logistics but also provide a much-needed shot in the arm for Indian shipyards, potentially leading to thousands of skilled jobs and new industrial capacities across coastal regions.
For now, the maritime and oil sectors await the next move—an official Expression of Interest that could set India’s shipbuilding vision into motion.
Author: shipping inbox
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