India to Build 24 Cargo Ships for Russia
India is reportedly in a deal to build 24 river-sea class cargo ships for Russia by 2027, as Russia continues to seek new outlets to support its struggling shipbuilding industry. With Russia facing numerous economic sanctions from the West due to the ongoing war in Ukraine, its shipbuilding sector has taken a major hit. This is forcing Russia to seek partnerships with other shipbuilding nations to keep up with ship orders.
The latest development appears to be an agreement with India and its state-owned Goa shipyard. Separately the Indian government has declared its intent to expand its shipbuilding industry seeking to be a global player that is well-timed with Russia’s needs.
Dmitry Dubovik, director of the Caspian International North-South Integration Club, revealed the deal last week during the Astrakhan International Forum in Russia. The event brought together stakeholders involved in the development of the proposed International North-South Transport Corridor (INSTC). One objective of the route is to connect Russia and India via the Caspian Sea through Iran. Previously, Russia had detailed its plans to build containerships tailored to the route.
According to Dubovik, the plan is to build vessels as part of the effort to expand shipping on the Caspian Sea. The first four ships are to be launched in 2024, coming from the Goa Shipyard. They will include chemical carriers, bulk carriers, and containerships tailored to the service.
“The advantages of cooperation with India are that the cost will be lowered by almost half to that of Russian manufacturers,” he highlighted to the participants.
The project according to Dubovik’s statements at the conference will be financed by the Russian Agency for Export Credit and Investment Insurance (EXIAR), through the Russian Export Center (REC).
This deal comes months after India and Russia announced in May that they were working to conclude an intergovernmental agreement on shipbuilding and ship repair.
“I would like to suggest that Astrakhan-based companies consider the possibility of using their competencies and ship personnel at our shipyards in India,” said Pawan Kapur, the Indian ambassador to China, while on a visit to Astrakhan City at the time. “I am participating in negotiations with Russia’s United Shipbuilding Corporation (USC). We will see how these two interests can be combined."
Last week, USC’s new owner VTB Bank revealed that the company is seeking a partnership with China as it is the number one shipbuilder in the world. USC is Russia’s largest shipbuilder and owns several shipyards in the country including the Astrakhan Shipbuilding Production Association (ASPO). It has also been reported that Russia was seeking shipbuilding support from India and China for its lagging efforts to build ice-class shipping as it moves to expand shipping in the Arctic.