India is home to one of the world’s most significant ship recycling clusters. Located along the coast of Gujarat, Alang plays a critical role in the maritime industry. To assess the current state of operations, regulatory readiness, and commercial viability, we visited Alang in June 2025. Our discussions with a wide range of stakeholders provided valuable insight into both the strengths of the ecosystem and the areas requiring attention.
Alang offers several natural geographic advantages for ship recycling. A 10-kilometer stretch of sloped, firm beach supports safe beaching and dismantling of large vessels. The region’s high tidal range, up to 36 feet, combined with strong underwater currents, facilitates controlled grounding and operations.
These conditions have enabled Alang to recycle a diverse range of vessels, including bulk carriers, tankers, passenger ships, offshore platforms, and container ships. The region has handled ships exceeding 80,000 MT LDT, demonstrating its capacity for high-volume and large-scale operations.
Ship Recycling yards follow a defined three-zone cutting process: primary (structural dismantling), secondary (component segregation), and tertiary (material recovery), focusing on sustainable ship dismantling. Heavy machinery such as cranes and winches are used for large-section handling.
Yards are equipped with impermeable flooring to prevent ground contamination, effective drainage systems, and designated areas for hazardous waste containment. Most operational yards have adopted standard operating procedures aligned with international safety and environmental expectations.
Most of the ship recycling yards are certified under ISO standards and comply with the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships (HKC). Safety officers with NEBOSH credentials supervise on-site protocols, and training in key safety domains is regularly conducted.
Some operators are using virtual reality-based modules for safety training. This includes simulations for enclosed space entry, firefighting, height work, and water rescue.
Approximately 30,000 workers are employed directly in Alang’s ship recycling yards. The ecosystem indirectly supports over 200,000 individuals through auxiliary sectors such as logistics, oxygen plants, steel re-rolling mills, and spare parts distribution.
Workers undergo mandatory training facilitated by the Gujarat Maritime Board before starting work. The minimum employment age is strictly set at 18, with child labor enforcement monitored regularly. Medical facilities include a multi-specialty hospital with ICU, MRI, and CT scan services, along with mobile medical units operating within the yard zones.
Welfare measures extend beyond statutory requirements. Many yards offer free accommodation, meals, transportation, and periodic community engagement activities to ensure workforce stability.
Alang supports a functional maritime circular economy. Ships are not only dismantled for steel but also for valuable spare parts, electrical systems, engines, and navigation equipment. These components are refurbished, tested on-site, and sold across India and to international buyers.
Warehouses maintain an extensive inventory, from O-rings and valves to entire generator sets, ready for resale after quality checks. This contributes to industrial efficiency and reduces the need for fresh imports of maritime equipment.
During high-volume years, recycled ship steel India has contributed up to 4 percent of India’s total steel production. Presently, this figure has dropped below 1 percent due to reduced ship arrivals.
Alang has undergone significant regulatory transformation. Global scrutiny in the early 2000s triggered reform. Judicial orders, the introduction of the Indian Ship Recycling Code in 2013, and the Indian Ship Recycling Act in 2019 (amended in 2021) collectively pushed the industry toward international compliance.
A key milestone will be reached on June 26, 2025, when the Hong Kong Convention enters into force. Alang is well positioned for this transition. Over 110 yards have already secured HKC Statements of Compliance (SoC) from various classification societies, including IACS members. The remaining yards are in the process of achieving compliance.
This demonstrates the industry's proactive approach and its commitment to aligning with global standards on safety, environmental management, and hazardous waste control.
At present, 112 out of 131 yards are formally recognized as HKC-compliant. This transition has been supported by government policies, including infrastructure subsidies, customs duty exemptions, and long-term lease arrangements provided by the Gujarat Maritime Board.
Despite policy support, access to structured finance remains limited. Upgrading yards to HKC standards involves a substantial investment. Banks and lending institutions have not developed dedicated instruments for this sector.
Most yard owners have relied on personal capital or unstructured borrowing. This limits the pace and scale of improvements, especially for small and mid-sized operators.
A formal credit mechanism, possibly backed by government guarantees or green finance instruments, could catalyze industry-wide upgrades and unlock additional capacity.
Ship recycling is cyclical and sensitive to global shipping trends. High freight rates reduce recycling activity. During 2024, Alang witnessed the lowest ship recycling volume in two decades. Only 20 yards were operational at the time of our visit.
Currency exchange remains another challenge. Ships are acquired in US dollars, while sales of recycled materials occur in Indian rupees. Any depreciation of the rupee compresses margins. Moreover, most transactions rely on usance LCs, resulting in delayed payments that affect liquidity and working capital cycles.
The combination of volatile supply, delayed payment structures, and exchange rate risk makes long-term business planning difficult.
Recognizing the long-term significance of ship recycling, the government is actively working to expand infrastructure and support capacity growth.
These efforts support long-term readiness, especially as global ship retirements rise due to environmental rules and aging fleets.
The key consideration is demand alignment. Can new infrastructure be sustainably utilized if market conditions remain uncertain? Stakeholders must balance readiness with adaptive planning to avoid underutilization.
Alang has built a robust foundation for safe, efficient, and internationally compliant ship recycling. It is now among the most prepared locations globally for the full enforcement of the Hong Kong Convention.
The fundamentals are strong: natural geography, skilled labor, technical infrastructure, and a supportive policy environment. Yet persistent issues remain, particularly in financing, steel certification, and price volatility.
A focused effort across regulatory, financial, and industrial domains is needed to secure Alang’s position in the global market. Key action points include:
Developing steel certification guidelines specific to ship-recycled material
Creating targeted financing solutions for HKC-compliant upgrades
Managing currency and credit risks through structured mechanisms
Supporting downstream industries in utilizing recycled components
Alang's evolution offers a model for balancing environmental responsibility with commercial viability. As the global maritime sector moves toward sustainability and accountability, ship recycling must be recognized not just as an end-of-life process but as a critical part of the maritime value chain.
Contact Us
Kiran Thorat is a Trader at GMS. He looks after sustainable ship recycling projects (an integral part of Sustainable Shipping and circular economy). He holds Bachelor's Degree from the Marine Engineering and Research Institute (MERI),India and Master's Degree in Energy, Trade, and Finance from Cass Business School, London.
Nayeem Noor is currently serving as the Business Development Head at GMS, the world’s largest buyer of ships and offshore assets for recycling. An alumnus of the prestigious Indian Institute of Technology (IIT) Roorkee, Nayeem has a strong background in business development and strategic market analysis.
Contact Us
Download GMS App
