Korea’s shipbuilders are moving quickly to deepen ties with India as global ship orders fall and executives and analysts warn the industry may have passed its peak. The companies see India as a potential base for long-term growth.

HD Hyundai said on Monday that it had signed a memorandum of understanding on Saturday for a new shipyard project in Madurai, in the southern Indian state of Tamil Nadu.

Tamil Nadu’s chief minister, M.K. Stalin, and T.R.B. Rajaa, the state’s minister for industries, investment promotions and commerce, attended the signing ceremony with Choi Han-nae, a planning director at HD Korea Shipbuilding & Offshore Engineering. If the project goes ahead, total investment could reach about $2 billion.

The agreement comes as India rolls out its Maritime Amrit Kaal Vision 2047 plan to expand shipbuilding capacity. The Indian government designated five states, including Tamil Nadu, Gujarat and Andhra Pradesh, as candidates for new shipyards and is reviewing potential sites. Tamil Nadu made shipyard development its top priority for boosting the local economy and chose HD Hyundai as its strategic partner.

Thoothukudi in Tamil Nadu, one of the leading candidate sites, attracts interest because major Korean companies such as Hyundai Motor and Samsung Electronics already operate nearby. Planned large investments in adjacent port facilities also raise expectations for future expansion.

HD Hyundai’s increased interest in India reflects broader industry concerns.

Clarkson Research says global vessel orders reached 19.38 million compensated gross tons in the first half of this year, down 54 percent from the same period last year. Analysts warn that Korean shipbuilders could face weaker performance within two to three years once they burn through existing order backlogs.

India, meanwhile, is emerging as a promising growth market. The government created a maritime development fund of roughly 250 billion rupees ($3 billion) this year and began full-scale support for shipbuilding and shipping.

Market research firm Ken Research says India’s shipbuilding and repair market grew from $90 million in 2022 to $1.1 billion last year, more than a twelvefold increase. Analysts expect annual growth of more than 60 percent through 2033.

India also plans to order 112 crude carriers from domestic shipyards by 2040 and invest about $10 billion. The government aims to develop shipbuilding clusters by securing 15,000 acres of coastal land and investing 1.5 trillion rupees.

HD Hyundai is also expanding cooperation with Cochin Shipyard, India’s largest state-owned shipbuilder. The two companies signed a broad MOU in July covering design, procurement support and productivity improvements and agreed in August to jointly pursue the Indian Navy’s landing platform dock program.

Hanwha Ocean and Samsung Heavy Industries have also explored entry into India since late last year. Hanwha Ocean met with officials at India’s Ministry of Ports, Shipping and Waterways and visited Hindustan Shipyard to discuss cooperation, while Samsung Heavy Industries introduced its shipbuilding technology directly to Indian government officials.

“India is expected to order not only standard container ships but also high-value LNG carriers, so it is important for Korean shipbuilders to establish a base there early,” said Yang Jong-seo, chief researcher at The Export-Import Bank of Korea’s Overseas Economic Research Institute. “Lower labor costs, continued investment and work force training could help create a mutually beneficial partnership.”
Source: Korea JoongAng Daily