India's ship recycling industry is projected to expand at a compound annual growth rate (CAGR) of 10% by 2028, according to a report by CareEdge Ratings.

The report highlights India's strong position in the global ship recycling market, accounting for 33% of the world's gross tonnage (GT) dismantled in 2023, second only to Bangladesh, which handled 46%.

The industry is expected to grow to 3.8-4.2 million GT by 2025, up from an estimated 2.3-2.6 million GT in 2024. One of the key contributors to this growth is Alang, Gujarat, home to more than 140 ship recycling yards and recognized as one of the largest facilities in the world.

India, alongside Bangladesh, Pakistan, and Turkey, dominates the global ship recycling sector, with these four nations responsible for over 90% of ship dismantling activities worldwide.

Sajni Shah, Assistant Director at CareEdge Ratings, noted several factors likely to fuel further growth in India's ship recycling industry. These include the cooling of the Baltic Dry Index (BDI), stabilization of heavy melting scrap prices, and an anticipated increase in obsolete ships by 2025. She added that countries with advanced infrastructure and green recycling facilities will likely attract a larger share of ships for dismantling in the future.

The report also highlighted fluctuations in scrap prices. In Bhavnagar, prices for heavy melting scrap surged from ₹28,800 per tonne in August 2020 to a peak of ₹54,400 per tonne in April 2022 due to supply chain disruptions and high demand for steel post-pandemic. However, by December 2023, prices had dropped to ₹39,900 per tonne, stabilizing between ₹36,000 and ₹44,000 per tonne throughout 2023.

The growing demand for sustainable ship recycling, coupled with India's strong infrastructure, positions the country as a key player in the global maritime industry in the coming years.