India to Export Cargo Ships for Russia

India to Export Cargo Ships for Russia

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India to Export Cargo Ships for Russia

Goa Shipyard to build vessels for the Caspain Sea route

It has been reported that Russia was planning to get shipbuilding support from India because it is lagging in its efforts to build ships for its route as it moves to expand shipping in the Caspian region. This move will also help the two countries in carrying out trade in respective currencies or in rupees. As it is India is paying for the Russian oil in rupees.

So now reportedly both countries are in a deal under which India will build 24 river-sea class cargo ships for Russia by 2027. Presently due to Ukraine conflict and the Western sanctions, the Russian shipbuilding industry is struggling. Due to numerous economic sanctions from the West due to the ongoing Ukraine conflict, the Russian shipbuilding sector has taken a major hit. So as to neutralize these unilateral Western sanctions, Russia is seeking seek partnerships with other advanced shipbuilding nations to keep up with ship orders.

The latest development is an agreement with India which has emerged as a major shipbuilder. 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. 

The director of the Caspian International North-South Integration Club, Shri Dmitry Dubovik, announced 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 given out its intentions for building containerships tailored to the given 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.”