In a significant move to enhance the nation’s shipbuilding capabilities, the Ministry of Ports, Shipping and Waterways (MoPSW) is formulating a new shipbuilding scheme that will incentivise Indian shipyards until 2035.
This initiative aims to propel India into the top ranks of global shipbuilding nations, targeting a position among the top 10 by 2030 and the top five by 2047, from its current 22nd place.
T K Ramachandran, Secretary of Ports, Shipping and Waterways, confirmed the development of the new scheme in a recent statement to PTI.
He highlighted that the ministry is committed to providing various incentives to foster growth in the shipbuilding sector.
This move aligns with both the Maritime India Vision (MIV) 2030 and the Maritime Amrit Kaal Vision 2047, which aim to establish India as a global economic superpower with a strong maritime sector.
Addressing the government’s commitment to green shipping, Ramachandran announced that the ministry will provide 30 per cent financial assistance for vessels where main propulsion is achieved through green fuels such as methanol, ammonia, or hydrogen fuel cells.
Additionally, vessels equipped with fully electric or hybrid propulsion systems will receive 20 per cent financial assistance.
India’s shipbuilding industry holds immense strategic and economic importance. With high growth potential, it can create numerous job opportunities and contribute significantly to the gross domestic product (GDP).
The sector’s indirect benefits, spanning industries like steel, engineering equipment, and port infrastructure, further amplify its significance.
Opportunities In The Global Context
Globally, the shipbuilding industry is dominated by South Korea, China, and Japan, which together hold over 90 per cent of the market share.
In contrast, India’s share is a mere 0.05 per cent, with Indian-owned and flagged ships accounting for only 5 per cent of its overseas cargo needs. This stark disparity underscores the need for a concerted effort to enhance India’s shipbuilding capabilities.
India’s shipbuilding industry, despite its 32 shipyards and extensive coastline, struggles with competitiveness due to inadequate policy support, limited private participation, and firm-level inefficiencies.
On the other hand, global leaders like Japan, South Korea, and China have thrived with substantial government support, foreign investments, and robust R&D initiatives.
Japan and South Korea received significant subsidies and tax benefits in the past, while China continues to use direct aid and tax subsidies for growth.
However, shipyards in countries such as China, South Korea and Japan are fully booked until 2028, as reported by the Economic Times.
This situation is forcing global fleet owners to consider alternatives, making it likely to view India as a potential manufacturing site for new vessels.
The demand for green ships to meet global decarbonisation goals also presents another significant opportunity. It is estimated that over 50,000 new vessels will be needed in the next 30 years to replace existing fleets.
This demand opens a lucrative market for India’s shipbuilding industry, which could potentially reach a worth of $62 billion by 2047, with ancillary industries contributing an additional $37 billion and creating around 12 million jobs.