India’s Proposed Shipbuilding Mission

• 27 Sep 2024

For Prelims: Shipbuilding Mission, Ship Repair and Recycling Mission, International Maritime Dispute Resolution Centre, Vadhavan Port, Galathea Bay, India Ports Global Ltd (IPGL), Chabahar Port, India-Middle East-Europe Economic Corridor (IMEC), Mundra Port, Maritime India Vision 2030. 

For Mains: Significance of port infrastructure for India’s economy. 

Source: LM

Why in News?

Recently, the Minister for ports, shipping, and waterways is preparing a Shipbuilding Mission to create a robust global shipbuilding industry by 2047, driven by the Make in India initiative. 

• The government is preparing a comprehensive strategy to place India among the top maritime powers. 

What are the Key Features of the Proposed Shipbuilding Mission? 

• Global Market Position: The government wants to position India among the top shipbuilding industry and a global maritime hub by 2047.  
  • India currently holds less than 1% of the global market share in shipping-related activities. 
• Comprehensive Strategy: The mission has identified twelve areas for action including financing, insurance, ship ownership and leasing, chartering, shipbuilding, ship repair, ship recycling, flagging and registration, operations, technical management, staffing and crewing, and arbitration.  
• Development of Shipbuilding Parks: It aims to establish mega shipbuilding parks along both coasts of India. The government has invited South Korea and Japan to explore foreign investment opportunities. 
  • They will be established in Maharashtra, Kerala, Andhra Pradesh, Odisha, and Gujarat. 
• Changing Current Trade Dynamics: Presently, approximately 95% of India's trade relies on foreign vessels, resulting in an annual outflow of USD 110 billion. The initiative aims to change this dynamic significantly. 
• Maritime Development Fund: The government plans to establish a Maritime Development Fund with a corpus of around Rs 25,000 crore to provide long-term financing for maritime initiatives. 
  • It may be set up on the lines of National Bank For Financing Infrastructure And Development (NaBFID).  
• Allied Missions: Two more missions are set to launch soon in line with this focused approach.  
  • Cruise India Mission: It will enhance port infrastructure and build exclusive cruise terminals to accommodate large cruise ships.  
  • Repair and Recycling: Beyond shipbuilding, India is gearing up to launch a Ship Repair and Recycling Mission.  
    • Kochi, Mumbai, Chennai, Kolkata, and Vadinar (Gujarat) will be further developed to become major repair hubs. 
• Centre of Excellence: A Centre of Excellence in Shipbuilding and Repair will be established to foster innovation in these sectors. 
• Free Trade Depot: A Free Trade Depot will be set up at shipyards to provide customs exemptions on imported materials for vessel repairs. 
• International Maritime Dispute Resolution Centre (IIMDRC): IIMDRC has been launched to resolve maritime disputes domestically, reducing reliance on global hubs like Dubai and Singapore. The IIMDRC provides merit-based and industry-governed solutions, positioning India as a global hub for arbitration. 
• Domestic Protection and Indemnity Entity: The Ministry is exploring the establishment of the India Club, a domestic entity to provide third-party maritime insurance for coastal shipping and inland waterways. It aims to mitigate exposure to international sanctions and pressures. E.g.,US, UK and European Union sanctioned Russian shipping companies due to the Ukraine war. 

What are the Recent Developments in India's Maritime Sector? 

• Port Infrastructure: India has ambitious plans for mega ports across the country, including the recently approved Rs 76,220 crore port at Vadhavan in Maharashtra. 
  • A mega port has been proposed at Galathea Bay in the Andaman & Nicobar Islands to capture transhipment cargo currently handled outside India. 
• Target of 40 Million TEUs: The ministry projects that container handling capacity in India will reach 40 million TEUs (twenty-foot equivalent units) in the next five years. 
  • Jawaharlal Nehru Port will increase its handling capacity from the current 6.6 million TEUs to 10 million TEUs, positioning itself as the first Indian port to achieve this milestone. 
• Hydrogen Manufacturing Hubs: A total of 3,900 acres of land has been allotted in Deendayal Port Authority (DPA), Kandla and VO Chidambaranar Port Trust (formerly Tuticorin Port Trust) for setting up hydrogen manufacturing hubs. 
• Global Expansion: India Ports Global Ltd (IPGL) took over the operations of terminals at various international ports in Sri Lanka, Myanmar, and Bangladesh.  
  • Also, India has successfully operationalised its contract for Chabahar port. 
• Trade Corridors: The proposed 4,800 km India-Middle East-Europe Economic Corridor (IMEC) will link Indian ports with countries like Saudi Arabia and the United Arab Emirates (UAE) and eventually extend to Europe.  
• MAITRI Platform: MAITRI (Master Application for International Trade and Regulatory Interface) integrates multiple Indian operational portals with those of the UAE, streamlining cross-border trade processes.   
  • It is designed as the backbone of the Virtual Trade Corridor (VTC) of IMEC which will facilitate secure and efficient sharing of trade data between countries. 

What are the Key Facts Related to the Shipbuilding Industry? 

• About Shipbuilding: Shipbuilding refers to the construction, repair, and maintenance of vessels used for transportation, defence, and trade. 
  • Specialised facilities called shipyards handle large-scale projects and complex ship assembly processes. 
• Global Shipbuilding Market Overview: The global shipbuilding market was valued at USD 207.15 billion in 2023 and is expected to grow to USD 220.52 billion in 2024. 
  • Major shipbuilding countries include China, South Korea, Japan, India, Germany, and the USA. 
  • China, South Korea, and Japan collectively control 85% of the market. 
• India’s Share in Shipbuilding Market: India holds 0.06% of the global shipbuilding market. India ranks 12th with USD 1.12 billion in shipbuilding exports while China leads with USD 25 billion exports. 
• India’s Shipbuilding Market Growth: In 2022, India’s shipbuilding industry was valued at USD 90 million and is projected to reach USD 8,120 million by 2033.  
  • The Indian shipbuilding market could unlock an opportunity worth over USD 237 billion by 2047 due to government support, strategic location, labour cost advantages. 
• India’s Top Shipbuilding Companies:  
  • Mazagon Dock Limited (MDL): Known for constructing warships for the Indian Navy and Coast Guard. 
  • Cochin Shipyard Limited (CSL): CSL specialises in offshore vessels, oil tankers, aircraft carriers. It is the largest shipbuilder in India and country’s largest ship-repair facility. 
  • Adani Group Initiative: In 2024, Adani Group announced a major shipbuilding initiative at Mundra Port in Gujarat, with a Rs 45,000 crore investment.  
    • It aims to position India as a global shipbuilding hub, targeting a USD 62 billion market by 2047.

What is Maritime India Vision 2030? 

• Maritime India Vision 2030 is a strategic initiative launched to strengthen the country’s maritime sector.  
• It has set a bold target to elevate India’s global ranking in shipbuilding and ship repair from over 20th place to the top 10 by 2030 and an ambitious goal has been set for the top-five position by 2047. 
• As of February 2023, it estimated an investment to the tune of Rs 1,00,000 to 1,25,000 crore for capacity augmentation and development of world-class infrastructure at Indian ports. 

Conclusion 

India's Shipbuilding Mission, driven by Maritime India Vision 2030, aims to position the country among the top global shipbuilding hubs. With government support, strategic investments, and international collaborations, the mission will boost India's maritime infrastructure, create millions of jobs, and strengthen global competitiveness. Its focus on innovation and sustainable growth will significantly enhance India's economic and geopolitical standing. 

Drishti Mains Question: 

Discuss the salient features of India’s Shipbuilding Mission under the Maritime India Vision 2030.