Fueling India's Marine Economy | 24 Oct 2023

The Indian Ocean is home to a vast array of marine life but is also under increasing pressure from pollution, overfishing, and climate change. A new set of guidelines released by the United Nations Environment Programme Finance Initiative (UNEP FI) could help unlock the financing needed to protect and restore the Indian Ocean. Blue bonds have the potential to make a significant contribution to the sustainable development of the Indian Ocean.

SEBI is developing guidelines for blue bonds in India. Once the policies are in place, blue bonds can finance many projects that benefit the Indian marine environment and economy.

What is the Significance of the Marine Economy in India?

• Food Security and Livelihood: It can contribute to food security, poverty alleviation, and employment generation for millions of people who depend on ocean resources for their livelihoods.
• Energy Security and Environmental Sustainability: It can help India achieve energy security and reduce carbon emissions by harnessing the potential of renewable energy sources such as wind, wave, tidal, and ocean thermal energy.
  • India has set a target of installing 175 GW of renewable energy capacity by 2022, of which 5 GW is expected to come from offshore wind projects.
• Trade and Connectivity: It can enhance India’s trade and investment opportunities with other countries, especially in the Indo-Pacific region, by improving its maritime connectivity and infrastructure.
  • India has launched several initiatives such as the Sagarmala Project, the International North-South Transport Corridor, and the Chabahar Port to boost its maritime trade and connectivity.
• Ecological Resilience and Climate Adaptation: It can help India build ecological resilience and adapt to climate change by conserving and restoring its marine ecosystems and biodiversity.
  • India is a signatory to various international conventions and agreements such as the Convention on Biological Diversity, the United Nations Convention on the Law of the Sea, and the Paris Agreement to protect its marine environment.
• National Security and Strategic Interests: It can also strengthen India’s national security and strategic interests by safeguarding its maritime boundaries and assets from external threats and challenges.
  • India has a strong naval presence in the Indian Ocean Region (IOR) and participates in various multilateral forums and exercises such as the Indian Ocean Rim Association (IORA), the Indian Ocean Naval Symposium (IONS), and the Malabar Exercise to enhance its maritime cooperation and security.
• Mineral Resources: Polymetallic nodules (small-ball-sized nodules; contain nickel, cobalt, iron, and manganese) that grow over millions of years on the seafloor, are often discovered at 4-5 Kms in water depth.
  • In 1987, India was granted exclusive rights to explore polymetallic nodules in the Central Indian Ocean Basin, which was extended for 5 years in 2017.
    • It has explored four million square miles and established two mine locations since then.

What are the Prospects of the Marine Economy in India?

• India's Marine Economy encompasses the ocean resources, marine infrastructure, and coastal zones within its legal jurisdiction.
  • India has a long maritime coastline of 7,500 km with nine coastal states and 1,382 islands.
  • India's Exclusive Economic Zone (EEZ) spans over 2 million square km, holding valuable resources like oil and gas.
• The coastal economy supports 4 million fishermen and coastal communities, making India the world's second-largest fish-producing nation with 250,000 fishing boats.
• Nine Indian states have coastline access, and the country has 200 ports, including 12 major ones that handled 541.76 million tonnes of cargo in FY21, with Mormugao Port in Goa as the leader.
• According to the Observer Research Foundation, the Indian Ocean is the third largest among the world's oceanic divisions. It spans an area of over 70 million sq km and is known for its abundant oil and mineral resources.

What are the Challenges faced by India’s Marine Economy?

• Lack of Infrastructure: India needs to invest more in ports, airports, roads, railways, and other infrastructure in its coastal areas to improve connectivity and efficiency.
  • According to a report by the Economic Advisory Council to the Prime Minister (EAC-PM), India’s port capacity is only 1.5 billion tonnes per annum, while its port traffic is expected to reach 2.5 billion tonnes by 2025.
• Marine Pollution: India’s coastal waters are polluted by various sources, such as industrial effluents, sewage, agricultural runoff, plastic waste, and oil spills. Marine pollution affects the health of marine ecosystems and biodiversity, as well as the quality of fish and seafood products.
  • According to United Nations Environment Programme (UNEP), more than 15,000 MT of waste (a lot of it is plastic) per day are dumped in the South Asian seas, generated from 60 major Indian cities.
• Overexploitation of Resources: India’s marine resources are under pressure from overfishing, illegal fishing, and unregulated aquaculture. Overfishing can lead to the depletion of fish stocks, loss of income and livelihoods for fishers, and reduced food security for millions of people. Illegal fishing can also undermine the sovereignty and security of India’s maritime domain.
• Climate Change: Climate change poses a serious threat to India’s Marine Economy, as it can cause sea-level rise, coastal erosion, storm surges, flooding, salinization, coral bleaching, ocean acidification, and changes in ocean currents and temperature. Climate change can also affect the distribution and abundance of marine species, as well as their migration patterns and breeding cycles.
  • According to a report by the Intergovernmental Panel on Climate Change (IPCC), the global mean sea level rose by about 15 cm during the 20th century and is projected to rise by another 26 to 82 cm by 2100.

What Measures can be taken to Strengthen India's Marine Economy?

• Developing a National Accounting Framework: It will measure the contribution of the Marine Economy to GDP, employment, trade, and other indicators. This will help in assessing the value and impact of the Marine Economy and designing appropriate policies and interventions.
• Coastal and Marine Spatial Planning: Implementing coastal and marine spatial planning that allocates space and resources for different activities and sectors in a coordinated manner. This will help in avoiding conflicts, optimizing resource use, and ensuring environmental sustainability.
• Strengthening the Legal and Institutional Framework for Ocean Governance: It will ensure compliance with national and international laws and regulations. This will help in protecting India’s sovereignty and security, preventing illegal activities, and resolving disputes.
• Enhancing the capacity and technology for marine research and innovation: It will support evidence-based decision making and foster new opportunities for growth. This will help in exploring the potential of emerging sectors such as offshore energy, deep-sea mining, biotechnology, and aquaculture.
• Promoting Cooperation and Partnerships: Promoting Cooperation with other countries and regional organizations that share common interests and challenges in the Indian Ocean region. This will help in enhancing mutual trust, sharing best practices, leveraging synergies, and addressing common threats.
• Blue Bonds: Blue bonds can provide funding for sustainable ocean projects in India, such as clean energy initiatives, offshore wind farms, marine conservation efforts, and pollution prevention and cleanup. These projects can create jobs, boost the economy, and contribute to environmental conservation.