Commodore Sujeet Samaddar, NM (Retd)<\/p>\n\n\n\n
Global sea-borne trade remains the oldest, most cost-effective, and important economic activity in the history of civilization. Accounting for 80 per cent global value and 90 per cent volume, the industry is a colossal market valued at US$ 380 billion in freight revenues, thereby contributing about 5 per cent of total world trade. This trade is carried by bulk carriers, container ships, oil, gas, and chemical tankers, ferries, and passenger ships, which are all built in shipyards. In 2024, the global shipbuilding market value reached US$ 162.14 billion and is projected at US$ 228.82 billion by 2032, growing at a CAGR of 4.4 per cent.<\/p>\n\n\n\n
India, as the world\u2019s most populous nation and the fourth largest economy, imports 19 per cent of global coal, 12 per cent of crude oil, and 16 per cent of LPG, amongst other goods. Regarding exports, India is the second largest exporter of tea, sugar, and iron, the third largest exporter of raw cotton, and the seventh largest exporter of textiles and petroleum products. These are majorly carried on foreign-flagged vessels, resulting in an annual outgo of US$75 billion as freight charges. As the Indian economy grows, the total coastal and EXIM cargo handling capacity is planned to increase from 2,500 MMT to 10,000 MMT by 2047, whilst Inland waterways would also jump from about 100 MMT to 500 MMT in the same period.<\/p>\n\n\n\n
The Ministry of Ports, Shipping, and Waterways launched the Maritime Amrit Kaal Vision 2047 document in 2021, which sets a target to become the fifth-largest shipbuilding nation by 2047. Currently, the Philippines holds this position with an annual output of 668,207 Gross Tonnage (GT), while Indian shipyards deliver 40,923 GT, which clearly shows the tremendous headspace available for the growth of the sector. Given India\u2019s advantages of low-cost skilled manpower, highly sophisticated design, engineering and manufacturing ecosystem, combined with the ready availability of high-quality steel and aluminium there is an unprecedented opportunity for investors to build and Flag ships in India.<\/em><\/strong><\/p>\n\n\n\n A study at the Research and Information System for Developing Economies, New Delhi (RIS), was conducted to assess vessel requirements and the associated capital outlay to structure long term domestic shipbuilding strategy. The study outlines a four-tiered shipbuilding plan. It seeks to first, address the replacement marke<\/em>t. A total of 631 ships exceeding 6 million DWT were identified for replacement, being more than 25 years old. Second, it proposes to invest in the coastal fleet<\/em>. Considering navigational constraints to service India\u2019s 200 minor ports with cargoes of coal, iron ore, cement, fertilizers, building materials could require 228 bulk 10,000 DWT bulk carriers. Another 106 container carriers, notionally of 1,700 TEU capacity, would be required for carriage of items like cotton, ceramics, food grains, and cars. Several dozens of MR product tankers\/LNG carriers would be required to ship petroproducts and LNG. Third, it recommends to rapidly expand the EXIM fleet as a strategic investment. <\/em>Aback-of-the-envelope calculation reveals that meeting half of the projected merchandise shipment in 2047 alone would need 2,894 Suezmax bulk carriers, averaging 2 international voyages a month. Fourth, it advocates that new green field shipyards should be ahead of the art in imbibing <\/em>newer technologies such as AI to optimize design and processes, and improve hull shapes to reduce drag and increase stability, resorting to robotic and additive manufacturing, etc., leading to substantial modernization and cost optimisation of new build ships which would provide the competitive edge to promote \u201cBuild in India: Build for the World\u201d.<\/p>\n\n\n\n These build requirements entail an estimated Rs 15-16 lakh crore of capital outlay. Recognizing the strategic and economic importance of the maritime sector India launched a four-pillar strategy to revitalize India\u2019s shipbuilding and maritime ecosystem. This comprehensive package of Rs.69,725 crore is designed to strengthen domestic capacity, improve long-term financing, promote greenfield and brownfield shipyard development, enhance technical capabilities and skilling, and implement legal, taxation, and policy reforms to create a robust maritime infrastructure. It includes a Shipbuilding Financial Assistance Scheme (SBFAS) with a total corpus of Rs.24,736 crore to incentivize ship building and establishes a National Shipbuilding Mission to oversee the implementation of all initiatives. A Maritime Development Fund (MDF) with a corpus of Rs.25,000 crore which includes a Maritime Investment Fund of Rs.20,000 crore and an Interest Incentivization Fund of Rs.5,000 crore to provide long-term financing for the sector has been allowed for. A Shipbuilding Development Scheme (SbDS), with a budgetary outlay of Rs.19,989 crore, is aimed to expand domestic shipbuilding capacity to 4.5 million Gross Tonnage annually, support mega shipbuilding clusters, infrastructure expansion. India Ship Technology Centre at the Indian Maritime University, Chennai would be set up for skill development. In addition, a RIS study group has proposed introducing Tokenisation and fractional ownership of ships as yet another innovative possibility to crowdsource finance for ship owners and shipyards.<\/p>\n\n\n\n Taking positive cues from these announcements, shipyards have moved swiftly. GRSE and Shoft Shipyard have won orders from European customers for building 7,500 DWT bulk carriers. CMA CGM signed a letter of intent (LoI) with Cochin Shipyard Limited for constructing six 1,700 TEU LNG-fuelled container ships worth US$ 300 million. CSL and HD Korea Shipbuilding & Offshore Engineering (HD KSOE) have signed a long-term strategic collaboration in shipbuilding. and GRSE are scouting for partners to build greenfield shipyards. The need to improve energy efficiency and promote the adoption of alternative or lower-carbon fuels for zero-emission shipping presents an opportunity to build electric and hybrid vessels in these new shipyards.<\/p>\n\n\n\n Apart from announcing a financial package, the government has shown intent to spur Ease of Doing Business in the country with the introduction of the Merchant Shipping Act 2025 and the Coastal Shipping Act 2025 with major reforms for Registration of Ships. RIS had suggested to introduce a India International Ship Registry at GIFT City and a dual Registry system to incentivise Flag in India supported with a more market friendly tonnage tax regime. In anticipation, the world\u2019s leading container lines are relocating tonnage to Indian waters\u2014Maersk\u2019s Vilnius now sails under the Indian flag, and CMA CGM has added four vessels to the national registry.<\/p>\n\n\n\n Shipbuilding can be a powerful engine for nation-building, with an investment multiplier of 11.2, an employment multiplier of 6.4, and a turnover multiplier of 4.2. The MSME sector would gain tremendously as shipbuilding requires a host of ancillary and support equipment and machinery. The immense participation and the palpable enthusiasm of delegates, exhibitors, and investors at the Global Maritime India Summit (GMIS) 2025 are a clear indicator that India is the new destination for Shipbuilding and Ship Owning. The sessions conducted on ship registration, innovative finance, and tonnage tax brought together the industry experts and policymakers with a clear intention to catalyse investment and establish a truly investible ecosystem for Build and Flag in India.<\/p>\n","protected":false},"excerpt":{"rendered":" Commodore Sujeet Samaddar, NM (Retd) Global sea-borne trade remains the oldest, most cost-effective, and important economic activity in the history […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[973,592,969,583,610,974,972,939,971,830,975,44,970,968],"yoast_head":"\n