Context:
The Minister for Ports, Shipping, and Waterways is spearheading a new Shipbuilding Mission aimed at establishing a strong global presence in the shipbuilding industry by 2047. This initiative is part of the broader Make in India campaign, which seeks to enhance domestic manufacturing capabilities.
Relevance:
GS III: Infrastructure
Dimensions of the Article:
- Overview of the Shipbuilding Industry
- Key Features of the Proposed Shipbuilding Mission
- Recent Developments in India’s Maritime Sector
Overview of the Shipbuilding Industry
Shipbuilding involves activities related to the design, construction, maintenance, and repair of various types of vessels used in transportation, defence, and commerce.
- Shipyards:
- Shipyards are specialised facilities responsible for assembling ships and managing large-scale maritime construction projects.
- Global Market Insights:
- In 2023, the global market for shipbuilding was valued at approximately USD 207.15 billion, and it is projected to grow to USD 220.52 billion by 2024.
- Key Shipbuilding Nations:
- The main contributors to the global shipbuilding industry include China, South Korea, Japan, India, Germany, and the United States.
- China, South Korea, and Japan account for a combined 85% of the global market share.
- India’s Contribution:
- India represents 0.06% of the global shipbuilding industry.
- The country ranks 12th globally, with shipbuilding exports valued at USD 1.12 billion, while China leads with exports worth USD 25 billion.
- In 2022, the value of India’s shipbuilding sector was USD 90 million, with projections indicating growth to USD 8.12 billion by 2033.
- Future Potential:
- The Indian shipbuilding sector has the potential to unlock opportunities worth over USD 237 billion by 2047, aided by government support, favourable geographic location, and cost-effective labour.
Leading Indian Shipbuilding Companies:
- Mazagon Dock Limited (MDL):
- A key player in constructing warships for the Indian Navy and Coast Guard.
- Cochin Shipyard Limited (CSL):
- Specialises in the production of offshore vessels, oil tankers, and aircraft carriers.
- CSL is India’s largest shipbuilder and operates the country’s most extensive ship-repair facilities.
- Adani Group’s Shipbuilding Initiative:
- In 2024, the Adani Group announced a large-scale shipbuilding project at Mundra Port in Gujarat, with a proposed investment of Rs 45,000 crore.
- The initiative aims to establish India as a major player in global shipbuilding, with a target market valuation of USD 62 billion by 2047.
Key Features of the Proposed Shipbuilding Mission
- Goal for 2047: The government aims to position India as a leading player in the shipbuilding industry and establish the country as a global maritime hub by 2047.
- Current Global Market Share: India currently holds less than 1% of the global shipbuilding market.
- Twelve Key Focus Areas: The mission has outlined twelve focus areas for development, including financing, insurance, ownership, leasing, chartering, shipbuilding, repair, recycling, flagging, registration, operations, technical management, staffing, crewing, and arbitration.
- Shipbuilding Parks: Plans are in place to develop mega shipbuilding parks on both the eastern and western coasts of India. South Korea and Japan have been invited to explore foreign investment opportunities.
- Locations: These shipbuilding parks will be located in states like Maharashtra, Kerala, Andhra Pradesh, Odisha, and Gujarat.
- Economic Impact: Since 95% of India’s trade relies on foreign vessels, the initiative aims to reduce this dependency and retain the estimated annual outflow of USD 110 billion.
- Maritime Development Fund: The government plans to create a Maritime Development Fund with a corpus of Rs 25,000 crore to provide long-term financing for maritime initiatives, potentially modeled after the National Bank for Financing Infrastructure and Development (NaBFID).
- Upcoming Missions:
Two additional missions are planned:- Cruise India Mission: Focused on upgrading port infrastructure and building exclusive cruise terminals to accommodate large vessels.
- Ship Repair and Recycling Mission: Aiming to develop India as a repair and recycling hub for ships.
- Major Repair Hubs: Cities like Kochi, Mumbai, Chennai, Kolkata, and Vadinar (in Gujarat) will be further developed into major repair centers.
- Centre of Excellence: A Centre of Excellence in Shipbuilding and Repair will be established to foster innovation in these sectors.
- Free Trade Depot: Customs exemptions for imported materials used in ship repairs will be provided through Free Trade Depots at shipyards.
- Maritime Dispute Resolution: The International Maritime Dispute Resolution Centre (IIMDRC) has been launched to resolve maritime disputes domestically, reducing dependence on hubs like Dubai and Singapore. The IIMDRC will offer merit-based, industry-governed solutions, positioning India as a hub for maritime arbitration.
- Third-Party Maritime Insurance: A proposal for establishing the India Club is being considered to provide third-party maritime insurance for coastal and inland waterways, protecting against international sanctions and economic pressures.
Recent Developments in India’s Maritime Sector
- Mega Ports Expansion: India has ambitious plans for establishing mega ports across the country, including the recently approved Rs 76,220 crore Vadhavan port in Maharashtra.
- Transhipment Port: A mega port is planned at Galathea Bay in the Andaman & Nicobar Islands, designed to handle transhipment cargo currently managed outside of India.
- Container Capacity Growth: The ministry projects that India’s container handling capacity will grow to 40 million TEUs (twenty-foot equivalent units) over the next five years.
- Jawaharlal Nehru Port: India’s Jawaharlal Nehru Port aims to increase its capacity from 6.6 million TEUs to 10 million TEUs, becoming the first Indian port to achieve this capacity milestone.
- Land Allotment for Hydrogen Manufacturing Hubs: Around 3,900 acres of land has been allocated to the Deendayal Port Authority (DPA) in Kandla and VO Chidambaranar Port Trust to establish hydrogen manufacturing hubs.
- International Port Operations: India Ports Global Ltd (IPGL) has taken over operations at international ports in Sri Lanka, Myanmar, and Bangladesh.
- Chabahar Port Contract: India has successfully operationalized its contract for Chabahar Port.
- India-Middle East-Europe Corridor: The 4,800 km India-Middle East-Europe Economic Corridor (IMEC) will connect Indian ports with Saudi Arabia, the United Arab Emirates (UAE), and Europe.
- MAITRI Interface: The Master Application for International Trade and Regulatory Interface (MAITRI) integrates India’s operational trade portals with those of the UAE, streamlining cross-border processes.
- Virtual Trade Corridor (VTC): This platform, designed for secure and efficient trade data exchange, forms the backbone of the IMEC corridor.
-Source: Live Mint
