From Shipbreaking to Sustainable Industry: India’s Maritime Recycling Moment

S Ahmad

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India’s ship recycling sector has evolved into a modern and internationally aligned industry. In 2025, India became the world’s leading ship recycling nation. Its global market share increased from 30.1% in 2024 to 35.4% in 2025. Ship recycling volume also rose from 1.86 million gross tons to 2.99 million gross tons. This represents nearly 60% growth in recycling volume. The Alang-Sosiya cluster remains the backbone of India’s recycling capacity. Comprehensive legislation, alignment with the Hong Kong International Convention, and yard modernisation have strengthened safety, compliance, and competitivenes

For decades, the phrase “shipbreaking” carried an uncomfortable image. It evoked ageing vessels being pulled apart piece by piece, vast quantities of steel being recovered, and workers operating in an industry often associated with hazardous conditions and environmental risks. Yet that image is increasingly out of step with the direction in which India’s ship recycling sector is moving.

Ship recycling is no longer simply about dismantling an obsolete vessel and selling its steel. It is becoming an important component of India’s maritime economy, circular economy ambitions, resource security and industrial strategy. The transformation is particularly significant because it brings together several priorities that are often discussed separately: environmental protection, domestic manufacturing, employment, steel production, occupational safety and international competitiveness.

India’s emergence as the world’s leading ship recycling nation in 2025 is therefore more than a statistical milestone. According to the latest figures cited from the United Nations Conference on Trade and Development, India’s share of global ship recycling rose from 30.1 per cent in 2024 to 35.4 per cent in 2025. The volume of ships recycled increased from 1.86 million gross tonnes to 2.99 million gross tonnes during the same period—an increase of nearly 60 per cent. The target under Maritime India Vision 2030 to become the world’s leading ship recycling nation has consequently been achieved five years ahead of schedule.

The numbers are impressive. But the more important story lies beneath them: India is attempting to redefine what ship recycling means and how such an industry should function.

From dismantling to recycling

A ship does not simply disappear when it reaches the end of its operational life. It contains enormous quantities of steel and other reusable materials, along with equipment, machinery and, potentially, hazardous substances. How that vessel is handled after decommissioning has consequences for workers, coastal ecosystems, industries and the wider economy.

This makes ship recycling an integral part of the maritime lifecycle rather than an activity peripheral to it. Properly regulated recycling allows materials to return to productive use while reducing the environmental and occupational risks associated with unsafe dismantling.

The distinction matters. A poorly regulated shipbreaking operation can expose workers to hazardous substances, generate pollution and create long-term environmental liabilities. A properly managed ship recycling facility, by contrast, can recover valuable materials, control hazardous waste, protect workers and feed resources back into the manufacturing economy.

That is the transition India is seeking to institutionalise.

The sector now operates within a framework that places greater emphasis on compliance, sustainability, worker safety and environmental management. This shift is important not merely for India’s reputation abroad but also for the long-term viability of the industry at home.

An industry built primarily around cheap labour and recovered scrap can be vulnerable to competition and regulatory pressure. An industry built around modern infrastructure, safety standards, environmental compliance and resource efficiency has a much stronger foundation for the future.

Why ship recycling matters to India

India’s growing role in ship recycling has strategic significance because the industry intersects with the country’s resource and industrial requirements.

Steel is at the heart of modern infrastructure and manufacturing. Every tonne of steel recovered from an end-of-life vessel represents material that can potentially re-enter the industrial cycle. Ship recycling therefore provides a significant source of ferrous scrap for the domestic steel industry and can reduce dependence on imported raw materials.

There is also an energy dimension. Recycled steel requires substantially less energy than primary steel production and can result in lower greenhouse gas emissions. In a country seeking to expand manufacturing while simultaneously pursuing sustainability and decarbonisation objectives, the importance of this resource loop should not be underestimated.

The circular economy is often presented as an abstract concept, but ship recycling provides a very tangible example of how it can work. A vessel that has completed its maritime service can become a source of steel and other reusable components rather than simply becoming a waste problem.

The economic benefits extend beyond the yards themselves. Ship recycling sustains a broad network of ancillary activities, including transportation, steel re-rolling, equipment supply, waste management and material recovery. It generates employment for workers involved in dismantling, processing and recycling and supports communities whose economic activity is linked to the industry.

This is where ship recycling intersects with the larger objectives of Make in India and Atmanirbhar Bharat. Recovered materials can support domestic manufacturing and industrial production, creating a connection between the end of one industrial lifecycle and the beginning of another.

In that sense, the recycling yard is not merely the final destination of an old ship. It can be the starting point for another chain of economic activity.

Alang and the making of a global hub

No discussion of India’s ship recycling industry can avoid Alang-Sosiya in Gujarat. The cluster forms the backbone of India’s recycling capacity and is recognised as the world’s largest ship recycling hub. It accounts for approximately 98 per cent of India’s ship recycling activity and has an annual recycling capacity of around six million gross tonnes.

The scale of Alang is difficult to understand without looking beyond the beaching yards. The cluster is supported by authorised ship recycling yards, downstream steel re-rolling mills and waste management infrastructure. Around 3.50 million metric tonnes of steel are produced annually at Alang without exploiting natural resources.

That industrial ecosystem is what makes Alang strategically important. Recycling cannot succeed simply because ships arrive at a yard. The recovered material must be safely handled, processed and directed towards productive use. Transportation, waste treatment, steel re-rolling and other ancillary activities must operate around the core recycling operation.

Over the years, the Alang-Sosiya cluster has therefore undergone extensive modernisation. The objective is not simply to increase the number of ships that can be dismantled but to improve the quality, safety and environmental performance of the entire process.

The next phase is even more ambitious. India aims to nearly double its ship recycling capacity to about nine million light displacement tons through the planned development of the Alang Ship Recycling Yard. A comprehensive master plan has been prepared to support future demand and improve infrastructure and competitiveness.

The challenge now is to ensure that expansion does not become synonymous with compromise. Capacity must grow alongside safety, environmental management and worker welfare.

The worker must remain at the centre

Industrial transformation is ultimately meaningful only when it improves the conditions under which people work.

Ship recycling is a labour-intensive activity involving dismantling, material handling and the management of potentially hazardous substances. That makes occupational safety not an optional addition but a fundamental requirement.

The establishment and expansion of training systems is consequently an important part of India’s evolving recycling ecosystem. The Safety Training and Labour Welfare Institute at Alang-Sosiya has cumulatively trained more than 1.5 lakh workers. Its training covers occupational safety, hazardous material handling and emergency response.

This represents an important change in the way the sector understands productivity. A modern industrial facility cannot measure success only by how much material it recovers or how quickly it processes a vessel. It must also measure whether workers return home safely.

Infrastructure upgrades at Indian ship recycling yards reflect this broader approach. Engineered and demarcated recycling plots, impermeable working surfaces, drainage systems, mechanised material-handling equipment, segregated hazardous-waste storage areas and authorised waste treatment and disposal linkages have become part of the modernised system. Structured arrangements for safety, health and emergency response are also being strengthened.

Such investments may not attract the same attention as tonnage figures, but they are ultimately more important to the credibility of the industry.

India’s global leadership will mean little if it is measured only by the number of ships recycled. The real test is whether India can demonstrate that large-scale ship recycling can be economically productive while being safe for workers and responsible towards the environment.

Regulation changes the equation

The strongest indication of the sector’s transformation is perhaps the regulatory architecture built around it.

India’s Ship Recycling Act, 2019 provides the primary legal framework for regulating the sector and gives domestic effect to international standards. It designates the Directorate General of Shipping as the National Authority and provides for authorisation, certification, inspection and enforcement. The Ship Recycling Rules, 2021 operationalise the framework through requirements relating to facilities, ship recycling plans, hazardous material management, worker safety, training and reporting.

The Ship Recycling Regulations, 2026 take that framework further by establishing detailed operational, safety and environmental standards. Together, the Act, Rules and Regulations create a structured system covering the ship recycling lifecycle—from preparation and certification to yard authorisation, operations and compliance monitoring.

This matters because regulation can determine whether an industry remains trapped in its informal past or becomes part of a modern industrial economy.

The regulatory framework also has an international dimension. The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships is the principal international instrument governing ship recycling. It lays down legally binding requirements for ships and recycling facilities and came into force on June 26, 2025.

India has aligned its domestic framework with the Convention. Financial assistance of ₹53.5 crore has been provided for modernisation, helping 115 facilities achieve compliance with the Hong Kong Convention.

This alignment is not merely about satisfying an international obligation. It can determine where global shipowners are willing to send vessels for recycling.

As environmental standards become increasingly important in global trade, countries that can offer credible, transparent and internationally compliant recycling facilities will have a competitive advantage. India’s opportunity, therefore, lies not only in having large yards but in making those yards trusted destinations.

The European test

India’s ambition to become a globally preferred recycling destination will ultimately be tested by international scrutiny.

Thirty-five ship recycling yards at Alang have applied for European Union green-listing, and the EU side has initiated the inspection process. Two Indian facilities—Shree Ram Vessel Scrap and Y. S. Investments—have been included in the draft of the 16th European List of Ship Recycling Facilities.

This process is important because international recognition of compliance can open access to a larger pool of vessels and strengthen the commercial position of Indian yards.

But it also raises the standard of accountability. Once a country positions itself as a leader in environmentally sound recycling, every incident of non-compliance can have consequences beyond an individual facility. Reputation becomes a collective asset.

That is why compliance cannot be treated as a certificate acquired once and then forgotten. It must become an operating culture.

Hazardous materials and the importance of traceability

One of the most important components of responsible ship recycling is the Inventory of Hazardous Materials, or IHM.

Ships can contain substances that pose risks to workers and the environment. Knowing what hazardous materials are present before a vessel enters a recycling facility is therefore fundamental to safe dismantling.

The IHM provides a mechanism for identifying and recording hazardous substances throughout the ship’s operational life and before recycling. India’s lifecycle-based approach seeks to improve transparency, traceability and risk mitigation before a vessel reaches an authorised recycling facility.

This is an area where technology, documentation and regulation come together. The safer the information chain, the safer the physical recycling process can become.

The objective should be to ensure that there are no surprises when a vessel reaches the yard. Workers should know what they are dealing with; facilities should have the infrastructure to manage it; and regulators should be able to verify compliance.

That is the essence of responsible recycling.

Connecting shipbuilding with ship recycling

Perhaps the most interesting development is that India is beginning to think of ship recycling and shipbuilding not as separate sectors but as connected parts of the maritime industrial cycle.

The Ship-breaking Credit Note Scheme under Ship Building Financial Assistance Scheme 2.0 is designed to encourage shipowners to recycle vessels at compliant Indian facilities while also promoting construction of new vessels at Indian shipyards.

Under the scheme, a credit note equivalent to 40 per cent of the recycled ship’s scrap value can be issued and used towards payment of up to five per cent of the value of a new vessel built at an Indian shipyard.

The logic is significant. Instead of treating recycling as the end of the story, policy can use it as one link in a broader maritime manufacturing ecosystem.

An old vessel is recycled responsibly. Its materials re-enter the economy. Shipowners receive an incentive to use compliant Indian yards. New vessels can then be built in Indian shipyards.

This creates the possibility of a circular maritime economy in which recycling, steel, manufacturing and shipbuilding reinforce one another.

For India, which has long sought a larger share of global maritime activity, this integrated approach could be more valuable than leadership in recycling alone.

Ex-INS Viraat: when history meets recycling

The recycling of Ex-INS Viraat at Alang offers an unusually powerful illustration of India’s evolving capabilities.

The aircraft carrier served the Indian Navy for 30 years and the Royal Navy for another 27 before being decommissioned in March 2017. It arrived at Alang for recycling in September 2020. Recognised by Guinness World Records as one of the world’s longest-serving warships, Viraat carried an extraordinary history into its final phase.

During its service, the vessel logged more than 22,622 flying hours, spent 2,252 days at sea and travelled more than 5.88 lakh nautical miles.

Its recycling was therefore more than the dismantling of a large ship. It was the final chapter in the physical life of a vessel that had played a major role in naval history.

The project also demonstrated the capacity of Indian recyclers to handle a large and complex vessel while recovering valuable materials and applying environmental and occupational safety standards.

There is a certain symbolism in that journey. A warship that once represented maritime power ultimately became a source of reusable material for the industrial economy. Its transformation captures, in one vessel, the larger principle behind recycling: nothing industrial should be viewed only in terms of its original purpose. At the end of one lifecycle, it can become part of another.

Leadership brings responsibility

India’s achievement in becoming the leading ship recycling nation is worth recognising. But leadership also creates expectations.

The temptation with any numerical success is to focus on scale: more ships, more tonnage, greater market share and expanded capacity. Yet the future of ship recycling cannot be determined by volume alone.

The next phase must be about quality.

India needs to ensure that modernisation reaches every participating facility, that training remains continuous, that hazardous materials are properly managed and that environmental safeguards are rigorously enforced. Mechanisation should improve safety rather than simply increase productivity. Waste treatment and disposal systems must keep pace with the growth of the sector.

There is also a need to ensure that the economic benefits of the industry remain connected to worker welfare and local development. A genuinely modern ship recycling ecosystem should generate not only steel and employment but safer workplaces, better skills and stronger communities.

The international market will increasingly reward precisely these qualities.

Global shipping is under growing pressure to become more sustainable. Shipowners will need credible destinations for vessels reaching the end of their operational lives. Countries capable of combining capacity with compliance will have an advantage.

India has the capacity. It now has to consolidate credibility.

The bigger maritime opportunity

India’s ship recycling achievement should also be viewed within the wider transformation of its maritime industrial landscape.

A strong maritime economy is not built only through ports and shipyards. It requires an ecosystem that includes logistics, manufacturing, shipbuilding, repair, recycling, waste management, steel and skilled human resources.

Ship recycling occupies a distinctive place within this system because it connects maritime activity with the circular economy.

The vessel that arrives for recycling is the product of an earlier industrial cycle. Its steel, machinery and components can feed another. The waste that cannot be reused must be safely treated. Workers require specialised skills. Transporters, re-rollers, equipment manufacturers and other enterprises support the ecosystem.

Seen this way, ship recycling is not a sunset industry. It can be a bridge industry—connecting the old maritime economy to the new one.

India’s task is to make that bridge stronger.

The country’s achievement in 2025 demonstrates that the market has recognised its capacity. The regulatory reforms demonstrate that policy has begun to catch up with that capacity. The next challenge is to ensure that infrastructure, technology, worker welfare and environmental performance advance at the same pace.

Beyond the numbers

The rise of India’s ship recycling industry tells a broader story about how industrial policy can change the character of a sector.

An activity once viewed largely through the lens of dismantling is increasingly being framed around recycling, resource efficiency, safety and international standards. The difference is not semantic. It represents a change in priorities.

India’s 35.4 per cent share of global ship recycling in 2025 and the nearly 60 per cent increase in recycling volume are important indicators of progress. But the more enduring achievement would be the creation of a system in which economic competitiveness and environmental responsibility are not treated as opposing objectives.

That is ultimately what responsible ship recycling should mean.

India has already achieved the Maritime India Vision 2030 target of becoming the world’s leading ship recycling nation ahead of schedule. The harder target now is to remain there—and to make that leadership synonymous with safety, sustainability, efficiency and trust.

The future of the industry will not be decided simply by how many ships India can recycle. It will be decided by what happens to the steel recovered from them, how hazardous materials are handled, how workers are protected, how facilities comply with international standards, how much value is created for the domestic economy and whether global shipowners regard Indian yards as dependable partners.

If India can get that equation right, ship recycling can become much more than a successful industrial niche. It can become a model of the circular economy in practice: ships reaching the end of their service, materials returning to production, workers gaining skills, industries receiving resources and environmental risks being managed through regulation and technology.

The journey from shipbreaking to responsible ship recycling is therefore not simply about changing the image of an old industry. It is about changing its purpose.

And in that transformation lies one of India’s most significant, if less celebrated, maritime opportunities.

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The article is based on the inputs and background information provided by the Press Information Bureau (PIB). Author is Writer, Policy Commentator. He can be mailed at kcprmijk@gmail.com