Bangladesh’s Shipbreaking Industry Faces Decline
The shipbreaking industry in Bangladesh, once a global leader, is facing significant challenges that threaten its position. In 2024, the industry imported fewer than 1 million Gross Tonnage (GT) of end-of-life ships for the first time in two decades. This decline is attributed to various factors, including economic downturns, rising international ship prices, and local demand issues. As Bangladesh grapples with these challenges, India is poised to take over as the leading player in the shipbreaking market.
Declining Imports and Economic Challenges
In 2023, Bangladesh’s shipbreaking industry imported only 1.02 million GT of scrap ships, a stark contrast to the 2-3 million GT processed annually in previous years. The decline began in 2022, primarily due to the economic fallout from the Covid-19 pandemic and the ongoing Russia-Ukraine war. These global events triggered a downturn that affected local demand and increased operational costs.
Industry leaders cite several reasons for the decline. The dollar crisis has made it difficult for local businesses to import ships. Additionally, high international ship prices have deterred potential buyers. Political unrest and an economic slowdown have further compounded these issues, leading to a significant drop in local demand.
Moreover, many shipbreaking yards are closing due to new environmental regulations. By July 2025, only green-certified yards will be allowed to operate, forcing many to halt operations for upgrades. This has led to a further decrease in imports, as fewer yards are available to process incoming ships. Experts warn that without government intervention and financial support, the industry may face a complete shutdown.
India’s Rise in the Shipbreaking Market
As Bangladesh’s shipbreaking industry struggles, India is rapidly expanding its capacity. Reports indicate that India aims to recycle between 2.3 and 2.6 million GT of ships in 2024, with projections to reach 3.8 to 4.2 million GT in 2025. Currently, India accounts for 33% of the global gross tonnage dismantled, making it a formidable competitor to Bangladesh, which recycled 46% in 2023.
Captain Anam Chowdhury, a shipbreaking expert, highlights that India has developed 120 green yards along its coast with $100 million in funding from international donors. In contrast, Bangladesh has only managed to establish five green yards in the last decade. This disparity puts Bangladesh at a disadvantage, especially as it ratified the Hong Kong Convention in 2023, which mandates that only green-certified yards can recycle ships after July 2025.
If the current trends continue, Bangladesh is likely to lose its top position in the shipbreaking industry. Experts urge the government to take immediate action to support the sector, which contributes significantly to the national economy. Without intervention, the future of Bangladesh’s shipbreaking industry remains uncertain, and thousands of jobs could be at risk.
The shipbreaking industry in Bangladesh is at a critical juncture. The combination of economic challenges, regulatory changes, and increased competition from India poses a serious threat to its survival. Immediate government support and strategic planning are essential to revitalize this vital sector and maintain its competitive edge in the global market.
