The ship recycling industry in India is expected to grow at a compound annual growth rate (CAGR) of 10 per cent by 2028, according to a new report.

India accounted for 33 per cent of the global gross tonnage (GT) dismantled in CY23, second only to Bangladesh, which handled 46 per cent, according to a report by CareEdge Ratings.

The ship recycling industry is expected to grow to 3.8-4.2 million GT in 2025, as against an estimated 2.3-2.6 million GT in 2024.

In India, Alang-Gujarat stands among the largest ship recycling facilities in the world, boasting over 140 recycling yards.

According to the report, India's ship-recycling industry is a crucial part of the global maritime sector.

The top four countries including Bangladesh, India, Pakistan, and Turkey dominate the ship-recycling industry, dismantling over 90 per cent of the global ship recycling volume.

India and Bangladesh consistently led the industry, while contributions from other countries were variable and generally lower.

According to Sajni Shah, Assistant Director, CareEdge Ratings, cooling-off of Baltic Dry Index (BDI), stabilisation of heavy melting scrap prices, and increase in obsolete ships in operations, suggest more ships to enter the recycling market from CY25 onwards.

Countries having better infrastructure and green recycling facilities are expected to attract a larger portion of ships in future, Shah added.

According to the report, prices for heavy melting scrap in Bhavnagar surged from Rs 28,800 per tonne in August 2020 to a peak of Rs 54,400 per tonne in April 2022, driven by supply chain disruptions and heightened demand for steel amid post-pandemic economic recovery efforts.

However, after peaking, scrap prices began to decline, settling at Rs 39,900 per tonne in December 2023. Since January 2023, prices have stabilised between Rs 36,000 per tonne and Rs 44,000 per tonne, the report added.