Green Shipping: Sustainability for Indian Exporters
India’s maritime sector is the lifeline of international trade, handling 95% of the country's trade by volume and 70% by value. While this sector drives economic growth, it also contributes significantly to global carbon emissions. Shipping is responsible for nearly 3% of global greenhouse gas (GHG) emissions, and India’s maritime activities form a notable share of this. As climate regulations tighten globally and domestically, Indian exporters face a dual challenge: adhering to sustainable shipping standards while maintaining cost efficiency in an increasingly competitive international market.
The shift toward green shipping is no longer optional—it is becoming a business-critical imperative. Exporters need to understand how evolving policies, technological advancements, and global carbon pricing mechanisms impact shipping costs, supply chains, and market access. This article explores the sustainability landscape for Indian exporters, the associated challenges, and actionable strategies to align with a greener, low-carbon future.
The Urgency for Green Shipping in India
India’s National Green Shipping Policy (NGSP), launched in 2019 and actively updated, lays out ambitious targets for decarbonizing maritime trade. Key objectives include:
- Achieving 500 GW of non-fossil energy capacity by 2030
- Reducing CO₂ emissions by 1 billion tonnes
- Achieving net-zero maritime emissions by 2070
These targets are complemented by alignment with International Maritime Organization (IMO) regulations, which focus on energy efficiency and emission reductions. Analysts project that shipping companies may face fuel cost increases of 14% and freight rate hikes of around 5% by 2030 due to these stricter compliance requirements. Exporters relying on older, fossil-fuel-powered fleets or non-compliant logistics partners will inevitably face rising costs and potential market access barriers.
Sustainability is becoming not just a regulatory requirement but a competitive differentiator. Exporters who act proactively can leverage green credentials to attract eco-conscious buyers, secure trade incentives, and avoid punitive tariffs in major international markets.
Key Challenges for Indian Exporters
1. Rising Freight Costs
Transitioning to greener shipping methods comes at a price. Carriers are investing in low-emission fuels such as LNG, biofuels, green hydrogen, and wind-assisted propulsion technologies. The additional capital and operational costs are often passed on to exporters, especially those using older vessels that do not meet IMO emission standards.
Exporters depending on these non-compliant carriers will experience higher freight bills. This makes cost forecasting and supply chain planning more critical than ever. Companies that invest in sustainability early can mitigate cost shocks, while late adopters risk paying premiums on every shipment.
2. Carbon-Based Tariffs
The Carbon Border Adjustment Mechanism (CBAM), set to launch in the EU from 2026, is designed to tax imports with high carbon intensity. India’s energy mix still heavily relies on coal, which can increase the carbon footprint of manufactured goods and exported commodities.
Under CBAM, exporters of steel, cement, chemicals, and other carbon-intensive products will need to pay a carbon tariff equivalent to the emissions embedded in their products. Failing to manage emissions not only increases costs but can restrict market access in key economies such as the European Union, UK, and Japan.
3. Policy Incentives for Green Trade
While compliance introduces new costs, Indian exporters also have policy-driven opportunities. Trade agreements such as the India–EFTA Trade and Economic Partnership Agreement (TEPA) signed in October 2025 include clauses supporting low-emission exports. These incentives demonstrate a growing trend: sustainability is increasingly linked with market access, trade facilitation, and preferential tariffs. Exporters who adopt green practices early can benefit from reduced duties, faster customs clearance, and priority in procurement contracts.
Action Plan for Indian Exporters
Transitioning to sustainable shipping requires both strategic planning and operational adjustments. Here is a practical roadmap for Indian exporters:
Collaborate for Cleaner Transport
Choosing the right logistics partners is key. Exporters should collaborate with shipping companies investing in LNG-powered vessels, biofuels, hydrogen propulsion, or wind-assisted technology. Many Indian ports, including Mumbai, Chennai, and Visakhapatnam, are now powered partially by renewable energy, creating “green corridors” for low-emission shipping.
Exporters can also consider multi-modal transport solutions, combining rail, inland waterways, and road logistics powered by electricity or hydrogen to reduce the overall carbon footprint of exports.
Ensure Regulatory Compliance
From 2027, all ships over 5000 Gross Tonnes (GT) trading with India must meet updated GHG intensity norms. Exporters must:
- Audit their logistics partners and shipping vendors
- Verify vessel compliance with IMO and Indian maritime regulations
- Track fuel consumption, carbon intensity, and other relevant metrics
Non-compliance can result in denied port entry, higher tariffs, and reputational risks, especially when dealing with environmentally conscious buyers in Europe, North America, and Asia-Pacific.
Build a Green Brand
Beyond regulatory compliance, brand positioning around sustainability is becoming a powerful differentiator. Exporters can showcase carbon responsibility by:
- Publishing verified emission reports
- Acquiring third-party eco-label certifications
- Promoting transparent, sustainable supply chains on digital platforms and B2B marketplaces
Companies demonstrating tangible green initiatives can attract premium contracts, win tenders in environmentally regulated markets, and enhance long-term brand loyalty. For instance, UK and EU buyers increasingly prefer suppliers who can quantify and reduce emissions across their supply chains.
Invest in Technology and Data Analytics
Sustainable shipping also requires digital transformation. Exporters can leverage data analytics tools to:
- Track shipment carbon footprints in real-time
- Optimize routes to reduce fuel consumption
- Monitor supplier compliance with environmental standards
Integrating technology helps exporters not only reduce emissions but also achieve cost efficiencies through smarter logistics management.
Global Market Trends Favoring Green Shipping
The push for sustainability in shipping is not limited to India. International regulations and buyer expectations are accelerating the shift toward low-carbon supply chains:
- International Maritime Organization (IMO) 2030/2050 targets aim to reduce shipping emissions by 40% by 2030 and 70% by 2050.
- The EU Green Deal and CBAM place carbon costs directly on importers.
- Leading shipping companies like Maersk, CMA CGM, and MSC are committing to net-zero emissions and offering green shipping options.
Indian exporters aligned with these trends can enhance competitiveness by tapping into green finance, preferential trade agreements, and premium eco-conscious markets.
Opportunities for Indian Exporters
Despite the challenges, sustainability presents several opportunities:
- Premium Market Positioning: Eco-conscious buyers are willing to pay higher prices for sustainable products.
- Operational Cost Savings: Investments in energy-efficient shipping, route optimization, and multimodal transport can reduce fuel consumption and long-term costs.
- Risk Mitigation: Proactively adopting green shipping standards reduces exposure to carbon tariffs, regulatory fines, and reputational damage.
- Market Access: Green credentials can become a gateway to new markets, especially in Europe, North America, and Japan, where sustainability compliance is increasingly mandatory.
Case Study: Leading Indian Exporters Adopting Green Shipping
Several Indian exporters have already begun integrating sustainability into their shipping operations:
- Tata Steel has implemented green corridors to transport steel using LNG-powered vessels, reducing CO₂ emissions per tonne-kilometer by over 20%.
- Amul Dairy uses hybrid and electric trucks for regional transport and explores wind-assisted vessels for exports to the Middle East.
- Infosys and Wipro have adopted carbon-neutral logistics for hardware exports and corporate mobility.
These examples highlight that early adopters not only comply with regulations but also strengthen their brand and improve customer trust.
Future Outlook for Green Shipping in India
By 2025 and beyond, sustainability is not just a regulatory or ethical obligation—it is a strategic business requirement. Exporters who invest in greener shipping practices, align with evolving maritime norms, and communicate their sustainability initiatives effectively will enjoy:
- Lower risk of cost spikes due to carbon pricing
- Enhanced brand recognition in environmentally conscious markets
- Preferential access to trade agreements and government incentives
- Long-term operational efficiencies through optimized logistics
Conversely, exporters who delay adaptation may face escalating freight costs, carbon tariffs, and restricted market access, risking both profitability and reputation.
Conclusion
The Indian maritime sector stands at a pivotal moment. As global climate mandates tighten and consumer expectations evolve, green shipping is becoming integral to the success of Indian exporters. Rising freight costs, carbon-based tariffs, and compliance requirements present challenges—but proactive adoption of sustainable shipping practices can turn these into opportunities for differentiation, cost savings, and market leadership.
Indian exporters must act decisively by choosing green carriers, complying with GHG intensity norms, investing in renewable-powered logistics, and showcasing transparent sustainability credentials. By doing so, they not only protect their bottom line but also position themselves as leaders in a global economy where environmental responsibility and trade competitiveness go hand in hand.
Green shipping is no longer a future possibility—it is the present necessity for Indian exporters aiming for sustainable growth, resilience, and long-term success in the international trade landscape.