India commands the largest share of the world’s shipbreaking industry, which is largely attributable to the method for breaking ships employed in its yards. Being labour-intensive, this method called beaching, not only generates employment but also requires little capital investment, which were factors that suited its use in the Indian market conditions. However, use of this method invited widespread criticism from various factions on account of the hazards it poses to labourers’ health and the environment. The international community, and subsequently the Indian lawmakers, have made efforts to regulate shipbreaking with a view to curtail these hazards. Despite these positive developments, environmentalists and labour rights activists have not been successful in securing a ban on the beaching method altogether. However, in 2013, the European Parliament came up with a regulation which, it is argued, would effectively exclude beaching as a disposal method for European vessels, and consequently for the Indian yards. In light of the afore-mentioned regulation and certain other developments, this paper argues that in the long run, from environmental, labour rights’ and economic perspective, phasing out beaching in favour of an alternate method called dry-docking would be the most sustainable approach for India, even though it is capital-intensive and would reduce the jobs currently offered by the sector. This paper also proposes the ways in which the requisite capital for making a shift to dry-docking could be arranged.