Pressmediaofindia
Related Articles
16-10-2025
PARIS: France’s CMA CGM on Tuesday announced a first-ever order for Indian-built vessels, saying the country’s focus on shipping infrastructure created an opportunity to diversify the group’s shipbuilding supply.
CMA CGM, the world’s third-largest container shipping firm, said in a statement it had signed a letter of intent for six vessels powered by liquefied natural gas to be built by Cochin Shipyard Limited.
The order, in which South Korean shipbuilder HD Hyundai Heavy Industries, opens new tab will have a technical role, covers smaller-scale vessels with a capacity of 1,700 containers each to be delivered between 2029 and 2031, CMA CGM said.
India is aiming to expand shipbuilding and port capacity to become less reliant on foreign freight firms. Japan’s second-largest shipping company Mitsui O.S.K. Lines, opens new tab said last month it wants to build tankers in India through tie-ups with local companies.
“The objective is to be in a position to rely on other shipbuilding countries, and India has proven to be one,” CMA CGM’s Chairman and CEO Rodolphe Saade said in an interview with India’s Economic Times newspaper.
China and South Korea dominate commercial shipbuilding. China’s leading role, however, is among the sources of tension in its wider trade war with the United States. Both Washington and Beijing imposed port fees this week on vessels with links to the other country.
CMA CGM is also studying the potential of having vessels built in the United States as part of investment commitments unveiled at the White House in March.
Since then, the level of engagement shown by CMA CGM and the way Cochin Shipyard also reciprocated by seeing the value in clinching an order from one of the two sides navigated the talks to close a $300 million deal for six, liquefied natural gas powered, 1,700 TEU capacity ships, which was much more than the number of ships that the French carrier had in mind when the discussion started.
Xavier, according to a second source familiar with his visit to Cochin Shipyard, felt that the yard was “not up to the mark compared to South Korea and other places” because there were a lot of process wastages, requiring big improvements “but he was very impressed with the yard’s technical knowledge and know-how and also with the large number of women in the technical team, which displayed the management’s approach towards diversity and inclusivity in ample measure. The only thing Xavier felt lacking was that they didn’t have a good focus, they were into anything and everything and took whatever orders that came their way, making the assembly line lacking specialization,” the second source said.
Policy hurdles and the wait for SBFA 2.0 clarity
As the talks progressed, a small hitch cropped up in the form of the government’ Shipbuilding Financial Assistance (SBFA) scheme, which allowed shipyards to receive an extra amount over and above the price paid by the ship owner ordering the ship, to neutralize the cost advantages faced by them while competing with yards in China, South Korea and Japan for orders. In the current scheme, the SBFA is pegged at 14 per cent of the cost of a ship.
In the February 1 Union Budget, Finance Minister Nirmala Sitharaman had announce the government’s plan to roll out a revamped SBFA policy but the details were yet to be worked out.
“The prevailing SBFA scheme was not conducive, and Cochin Shipyard would have had to pay through its nose if it had quoted the ships’ price to CMA CGM based on the 14 per cent assistance in vogue. Hence, Cochin Shipyard waited to get a clarity about the SBFA 2.0,” the second source revealed. (Int’l Monitoring Desk)
