Shipping Ship building and ship repair has a direct relationship with nation building. History informs us that every great power possessed a vibrant shipbuilding industry and operated best in class ships that helped maintain continued and unimpeded access to resources, commodities and markets which are the vital pillars of a nation’s economy.
With India having a share of only 0.15% share of global shipbuilding and owning only about 1% of the World Mercantile Fleet the annual outgo on EXIM trade alone is greater than US$52 billion paid to foreign shipping companies. Only 6.4% of the national cargo is freighted through coastal shipping. This is a huge strategic weakness and exposes the nation’s secure and sustained access to commodity, resources and markets to geopolitical forces. This should no longer be acceptable.
The key impediments to the growth of this strategic sector are firstly lack of cargo, secondly high cost credit to shipbuilders and shipowners and lastly cabotage. The attached paper addresses these issues.
It may be noted that of the 28 shipyards, 5 shipyards are already bankrupt which must be viewed as a national loss in shipbuilding capability. Three of them can easily be revived if the Government provides them similar support as it extends to the DPSU shipyards.
Ship repair includes activities such as ship conversions, overhauls, maintenance programmes, major damage repairs and minor equipment repairs. Globally, ship repair industry is growing fast with the additional requirements of compliance with new Marine Pollution Norms, a turnover of around US$12 billion (approximately INR 55, 000 crores). However, currently India is a small player in this industry with a global share of only between 1 to 2 per cent. As India is strategically located along the major shipping lanes between the East and the West, the country can benefit from this booming market. There are 34 dry-docks for repairing ships in India both in public and private sector. In comparison, China has 176 dedicated ship repair yards and 316 ship building yards. The sector needs proactive support for India to reach its target GDP of US$5 trillion by 2025.
For the accelerated, integrated and coordinated development of this strategic sector a National Shipbuilding Authority of India is an urgent requirement along the lines of the NHAI. Under this authority a Shipbuilding and Shipping Development Bank of India to provide stapled credit for all shipbuilding projects which are services by assured contracts of freightments with user ministries is proposed.