In December last year, state-owned IOC issued a global tender and offered Indian shippers a first right of refusal as the nation seeks to boost its shipping industry. India, the world's third-biggest oil importer, wants to promote the market share of its vessels in bringing in crude imports.

But the Panama-flagged very large crude carrier (VLCC) Bright Pioneer, owned by Nissen Kaiun Co Ltd, has emerged as the likely winner for a daily rate of $30,000-$32,000 (£23,792 - £25,379), the sources said.

None of the Indian companies could match the bid, they said. "Indian companies declined the first right of refusal," said one of the sources.

That will be a blow to the federal shipping ministry, which wants the state-refiners to sign five-year contracts with local shipping firms to shift freight worth billions of dollars to Indian flag carriers, including Shipping Corp of India (SCI), Mercator Ltd, Great Eastern Shipping Co and Essar Shipping.

SCI, Great Eastern, Seven Island Shipping and other Indian shipping companies participated in the IOC tender, the sources said.

"We did not match the offer as the rates were not in line with market trends. Very low rates have been offered," said an official at SCI.

The introduction of the scrubbers is important because the International Maritime Organization (IMO) is introducing the rules on marine fuels from the beginning of 2020, limiting the sulphur content to 0.5 percent, down substantially from the current 3.5 percent, to curb shipping pollution.

IOC will be using Bright Pioneer from January 2020 for at least five years, giving its Singapore-based operator Global United Shipping Company six months to install the scrubbers.

IOC and Global United Shipping did not respond to Reuters emails seeking comments.

By stripping out sulphur emissions, scrubbers allow shippers to use dirtier fuel oil but still meet new global requirements for lower emissions.

The IMO says that when the new rules come into force it will ban ships that do not have scrubbers from carrying any fuel oil, making it easier to catch cheaters.

The duration of the IOC contract can be extended by another two years to a total of seven.

(Reporting by Nidhi Verma; Editing by Martin Howell and Tom Hogue)

By Nidhi Verma