Nation Building through Ship Building

India’s share in global ship building industry is less that 1%. About 7% of its trade is carried by Indian flagged vessels. The cost of logistics in India is about 15% of GDP, which is much higher than that in Europe & China making Indian goods uncompetitive in international market. These are some of the numbers, which have triggered a serious discussion about role of shipbuilding industry in India's economic growth & social development. Hon. PM Modi has set the ambitious target of making India a USD 5 trillion economy by 2024. Shipping & port sector will have to play crucial role if India has to achieve this target. 

Historically, thriving ship-building industry has played pivotal role in the emergence of major economies. It’s highly labor intensive industry and triggers growth in other sectors. Financial crisis of 2008 hurt the private Indian shipyards badly. Defense shipbuilding alone can’t sustain the industry for long and hence commercial ship building activity is crucial for the revival of the industry. Indian Shipyards have built vessels for international customers in the past. What’s lacking is domestic demand, bankable projects and long term perspective. 

FICCI in collaboration with National Maritime Foundation (NMF) organized a comprehensive discussion on this topic in Delhi. Government of India has taken some concrete steps to support the sector. It includes granting infrastructure status to ship building activity, giving financial assistance etc. SAGARMALA project and development of 106 new Inland waterways is likely to create demand for shallow draft vessels, passenger ferries, cargo vessels, barges etc. Experience of many European countries show that domestic demand sustains the industry/ shipyards before they can venture into international market. The Chinese & Korean experience of investing in infrastructure creation is relevant for India. Study of highly successful maritime clusters in Norway is important to understand role of government policies, competitive cooperation among industry & geographical specialization in the development of tech-driven, future ready maritime industry.

India has the advantage of geographical location, huge domestic consumer base, growing economy, availability of highly skilled professionals & low cost labor. With long term policy support and investments, India can emerge as important ship building nation. This fits well into government’s focus on Blue Economy and making India a USD 5 trillion economy by 2024.

- Pankaj R. Patil, Innovation Norway India