The Strait of Hormuz is one of the world’s most critical maritime chokepoints, linking the Persian Gulf with the Arabian Sea. Around 20% of global oil and a significant share of liquefied natural gas pass through this narrow passage daily and 90% of middle east trade.
As we see a Rising tensions between Iran and Israel, with Iran threatening to block the strait, pose a severe threat to global energy security and international trade.
A closure could disrupt oil supplies, spike global fuel prices, and destabilize economies, especially in Asia and Europe. The world watches closely, as any conflict in this region could have far-reaching geopolitical and economic consequences.
While this goes on, another deep concern rises for India as we depend heavily on international trade and import and on international players on the shipping. None of them are our own indigenous companies.
A 2022 statistics says India spends $70B+ annually on shipping—bleeding forex reserve due to reliance on foreign carriers like MAERSK(denmark) , MSC (Switzerland) & COSCO (China) .
To become a $5T economy, India must stop renting ships & start owning them.
A domestic shipping fleet isn’t a luxury – it’s a logistics necessity.
When shipping costs increase, they directly impact the Logistics Performance Index (LPI) of a nation. For a country like India, where 95% of trade by volume moves by sea, the implications are massive.
According to estimates from 2022, India spends over $70 billion USD annually on shipping — an enormous burden that bleeds forex reserves.
But Why?
Because we depend heavily on foreign and global players in carriers like :
🔸MAERSK (Denmark)
🔸MSC – Mediterranean Shipping Company (Switzerland)
🔸COSCO (China)
This outsourcing of ocean freight makes us vulnerable to :
- Global freight rate fluctuations
- Geopolitical blackmail (recall COVID supply crunch & Red Sea tensions)
- Higher insurance premiums
- Inflexible shipping routes
- Poor control over strategic trade
The lack of Indian-owned vessels affects both export competitiveness and import affordability — hurting Indian businesses, especially MSMEs, Pharma, Fertilizer and Petroleum based industries , who rely on predictable logistics for it’s survival.
So what’s the Solution ?
India must urgently:
- ✅ Develop a national merchant fleet
- ✅ Encourage Indian corporates (e.g., Reliance, Adani, L&T, Tata) to invest in shipping
- ✅ Form a public-private consortium with State financial backing
- ✅ Create shipping finance institutions to support fleet expansion
- ✅ Ease taxation & regulatory norms for Indian shipowners
If India is to become a $5 trillion economy, it must stop renting ships and start owning them.
Building a self reliant domestic shipping fleet is not a luxury — it should be a national logistics priority.
Because controlling the sea lanes is controlling trade power.
India cannot afford to be left behind in the race while being a 3rd Largest economy. Otherwise ww will land up into a mere Global Consumer Population not a Manufacturing warehouse.
