28-September-2024-Editorial

SHIPBUILDING MISSION

India’s shipbuilding industry has seen significant focus in recent years, driven by the “Make in India” initiative and the government’s goal of becoming a global maritime hub by 2047.

The Shipbuilding Mission aims to propel India into the ranks of leading maritime nations through a combination of strategic planning, investment, and international collaboration.

Key Features of the Proposed Shipbuilding Mission:

Global Market Position:

• India aims to become a top player in the global shipbuilding industry by 2047.
• Currently, India’s market share in global shipbuilding is less than 1%, but the government envisions significant growth in this sector.

Comprehensive Strategy:

• The mission outlines 12 key action areas, including financing, insurance, ship ownership and leasing, chartering, shipbuilding, ship repair, recycling, flagging, registration, operations, and staffing.
• These areas address critical aspects necessary for the development and growth of the shipbuilding sector in India.

Development of Shipbuilding Parks:

• Plans include establishing large shipbuilding parks along India’s coasts.
• These parks are set to be developed in collaboration with international partners such as South Korea and Japan, enhancing foreign investment opportunities.
• States like Maharashtra, Kerala, Andhra Pradesh, Odisha, and Gujarat will be key locations for these parks.

Reducing Dependency on Foreign Vessels:

• Presently, 95% of India’s trade is handled by foreign ships, resulting in a significant annual outflow of USD 110 billion.
• The Shipbuilding Mission aims to increase India’s self-reliance in shipping and reduce this outflow.

Maritime Development Fund:

• A Maritime Development Fund with a corpus of Rs 25,000 crore is proposed to provide long-term financing for maritime projects.
• This fund will be modelled on the National Bank for Financing Infrastructure and Development (NaBFID), focusing on infrastructure financing.

Allied Missions:

The government plans to launch additional missions aligned with the shipbuilding mission:

• Cruise India Mission: To boost port infrastructure and create terminals for large cruise ships.
• Ship Repair and Recycling Mission: Aimed at enhancing ship repair capabilities at locations such as Kochi, Mumbai, Chennai, Kolkata, and Vadinar.

Centre of Excellence for Shipbuilding and Repair:

• This Centre will be established to foster innovation and research in the shipbuilding and repair sectors.
• It will focus on improving technologies and practices in these critical areas.

Free Trade Depot:

• A Free Trade Depot will be created at shipyards, allowing customs exemptions for imported materials used in vessel repairs.

International Maritime Dispute Resolution Centre (IIMDRC):

• The IIMDRC was launched to provide domestic arbitration for maritime disputes, reducing reliance on foreign arbitration hubs such as Dubai and Singapore.
• This centre offers industry-specific solutions, positioning India as a key player in international maritime arbitration.

Domestic Protection and Indemnity (P&I) Entity:

• The Ministry is exploring the creation of an Indian entity to provide third-party maritime insurance.
• This entity, named “India Club,” would offer insurance for coastal shipping and inland waterways, protecting against international sanctions and disruptions.

Recent Developments in India’s Maritime Sector:

Port Infrastructure Development:

India is actively expanding its port infrastructure, with new mega ports planned.

• For example, a new port at Vadhavan, Maharashtra, has been approved with an investment of Rs 76,220 crore.
• Another major port is proposed at Galathea Bay in the Andaman & Nicobar Islands, aimed at capturing transshipment cargo.

Container Handling Capacity:

• India aims to increase its container handling capacity to 40 million TEUs (twenty-foot equivalent units) within the next five years.
• Jawaharlal Nehru Port will increase its capacity from 6.6 million TEUs to 10 million TEUs, becoming India’s first port to reach such a milestone.

Hydrogen Manufacturing Hubs:

• Hydrogen manufacturing hubs are being established at Deendayal Port Authority (Kandla) and VO Chidambaranar Port (Tuticorin), with 3,900 acres of land allotted for these developments.

Global Expansion:

• India Ports Global Ltd (IPGL) has taken over the management of terminals in countries like Sri Lanka, Myanmar, and Bangladesh.
• The successful operationalization of the Chabahar port is a significant development, enhancing India’s strategic trade routes.

Trade Corridors and MAITRI Platform:

• The proposed 4,800 km India-Middle East-Europe Economic Corridor (IMEC) will link Indian ports with countries such as Saudi Arabia and the UAE, eventually extending to Europe.
• The MAITRI (Master Application for International Trade and Regulatory Interface) platform will streamline trade processes between India and the UAE, improving cross-border trade.

About Shipbuilding Industry:

Shipbuilding involves the construction, repair, and maintenance of ships for transportation, defence, and trade. Specialized shipyards handle large-scale projects, including complex assembly processes.

Global Market:

• The valuation of the global shipbuilding market reached USD 207.15 billion in 2023, and it is projected to increase to USD 220.52 billion in 2024.
• China, South Korea, and Japan control 85% of the global market share.

India’s Position:

• India currently holds 0.06% of the global shipbuilding market, ranking 12th with exports valued at USD 1.12 billion.
• China, in contrast, leads with USD 25 billion in exports.

Growth Potential:

• India’s shipbuilding industry, valued at USD 90 million in 2022, is projected to grow to USD 8,120 million by 2033.
• Government support and strategic advantages, such as lower labour costs, are expected to unlock opportunities worth USD 237 billion by 2047.

Major Indian Shipbuilders:

• Mazagon Dock Limited (MDL): Specializes in building warships for the Indian Navy and Coast Guard.
• Cochin Shipyard Limited (CSL): The largest shipbuilder in India, focusing on offshore vessels, oil tankers, and aircraft carriers.
• Adani Group: Announced a Rs 45,000 crore shipbuilding initiative at Mundra Port, targeting a USD 62 billion market by 2047.

Conclusion:

India’s Shipbuilding Mission, aligned with Maritime India Vision 2030, aims to transform the country into a global shipbuilding hub by 2047. With government support, international collaboration, and strategic investment, this initiative will enhance India’s maritime infrastructure, create millions of jobs, and boost the nation’s competitiveness in the global market. The focus on innovation, sustainability, and trade reforms will further elevate India’s economic and geopolitical standing in the maritime domain.