IOCL, BPCL & HPCL Join SCI to Form Maritime JV, Target ₹6 Lakh Crore Freight Outgo Reduction

By Admin

27 Feb, 2026

India’s leading oil refiners and the national carrier are set to form a strategic maritime joint venture aimed at strengthening domestic shipping capacity and reducing reliance on foreign vessels for crude oil and petroleum product transportation.

State-run refiners  Indian Oil Corporation (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL)  will partner with Shipping Corporation of India (SCI) to create a powerful maritime alliance designed to transform India’s shipping and energy logistics landscape.

Strategic Ownership Structure

Under the proposed structure:

• SCI will hold a majority 50% stake.
  
  

• IOCL, BPCL, and HPCL will collectively hold 35%.
  
  

• The remaining 15% stake will be owned by the Maritime Development Fund (MDF).
  
  

This collaborative ownership model ensures operational expertise from SCI while guaranteeing cargo commitments from the oil marketing companies.

Reducing ₹6 Lakh Crore Freight Outgo

India currently spends nearly ₹6 lakh crore annually on freight payments to foreign-flagged vessels for transporting crude oil and petroleum products. This represents a significant foreign exchange outflow.

The joint venture is designed to progressively onshore India’s chartering requirements, thereby:

• Reducing dependence on foreign shipping companies
  
  

• Conserving valuable forex reserves
  
  

• Strengthening India’s long-term energy security
  
  

• Building domestic maritime capabilities
  
  

SCI Chairman B K Tyagi confirmed that technical specifications and tender terms are currently being finalised, marking a crucial step toward operationalisation.

Fleet Expansion Plan: 59 Vessels

The proposed joint venture plans to acquire 59 vessels, including:

• Very Large Crude Carriers (VLCCs)
  
  

• Very Large Gas Carriers (VLGCs)
  
  

• Offshore vessels
  
  

The acquisition strategy will combine second-hand vessel purchases from the global market with newbuild ships constructed at Indian shipyards.

The total estimated investment ranges between ₹15,000 crore and ₹17,000 crore, highlighting the scale and ambition of the initiative.

Operational Model and Management

SCI will provide:

• Technical expertise
  
  

• Operational management
  
  

• Regulatory compliance support
  
  

Meanwhile, IOCL, BPCL, and HPCL will secure long-term charter contracts, ensuring steady cargo flows for the JV’s fleet.

The vessels procured under the venture will be managed by SCI for a designated management fee, creating a structured and professionally governed maritime enterprise.

Role of Maritime Development Fund (MDF)

The Maritime Development Fund (MDF), a government-backed blended finance initiative with a corpus of ₹25,000 crore, has been established to catalyse private investment and provide long-term financing to India’s maritime sector.

Its participation strengthens financial viability and aligns the JV with India’s broader maritime growth strategy.

Strengthening Maritime Self-Reliance

This joint venture represents a significant milestone in India’s journey toward maritime self-reliance. By increasing domestic ship ownership and reducing foreign freight dependency, India can:

• Enhance trade resilience
  
  

• Improve energy supply security
  
  

• Boost indigenous shipbuilding
  
  

• Strengthen its position in global maritime logistics
  
  

The collaboration between IOCL, BPCL, HPCL, and SCI signals a decisive shift toward strategic control over critical energy supply chains and long-term national economic stability.

As India continues to expand its energy demand and global trade footprint, this maritime JV could become a cornerstone of the country’s shipping and logistics transformation.