South Korea, renowned for housing some of the world’s top shipbuilding companies, is playing a pivotal role in India’s bold efforts to advance its shipbuilding industry. Aiming to rank among the top 10 shipbuilding nations by 2030 and break into the top 5 by 2047, India is looking to forge strategic partnerships with South Korean shipyards. This collaboration seeks to tackle challenges within India’s shipbuilding sector and enhance its competitiveness on the global stage. Let’s explore the latest developments and India’s ambitions in shipbuilding.
India’s Shipbuilding Industry: Current Challenges
India, currently holding less than 1% of the global shipbuilding market, has recognized the need to modernize its shipbuilding infrastructure to meet the growing demands of the global maritime industry. The country’s shipyards, though capable of constructing small and medium-sized vessels, face significant challenges in building large vessels like Very Large Crude Carriers (VLCCs), Capesize bulk carriers, and Ultra Large Container Vessels (ULCVs).
Despite its expertise in conventional shipbuilding, India struggles with several obstacles:
- Long Construction Timelines: Indian shipyards have longer lead times for constructing vessels compared to their counterparts in South Korea and Japan.
- Limited Technical Expertise: India lacks the technical expertise to build specialized ships, including LNG carriers, Floating Storage Regasification Units (FSRUs), and car carriers.
- High Costs: The procurement of essential equipment and machinery takes longer, which significantly impacts production efficiency and profit margins.
To overcome these hurdles, India is looking towards South Korea, a global leader in shipbuilding, for collaboration in improving its shipbuilding capabilities.
High-Level Delegation Visits South Korea for Collaboration
In a significant diplomatic move, a high-level Indian delegation, led by T.K. Ramachandran, Secretary of the Ministry of Ports, Shipping and Waterways, visited South Korea to discuss potential collaborations. The delegation included key officials such as R. Lakshmanan, Joint Secretary of the Ministry of Ports, Shipping and Waterways, Madhu Nair, Chairman and Managing Director of Cochin Shipyard Ltd, and Capt B.K. Tyagi, Chairman of Shipping Corporation of India Ltd.
The purpose of the visit was to explore the ship construction methods and technologies employed by South Korea’s top shipyards, including Hyundai Heavy Industries, Hanwa Ocean Co Ltd, and Samsung Heavy Industries. The meetings were positive, with South Korean officials expressing keen interest in forming partnerships with Indian shipyards.
Opportunities for Technical Collaboration and Joint Ventures
The primary focus of the collaboration lies in the following areas:
- Ship Design and Technology: India aims to leverage South Korea’s advanced ship design and construction technologies to improve its own shipbuilding processes.
- Production Efficiency: South Korean yards are renowned for their high productivity levels. India seeks to adopt methodologies that can boost productivity at Indian shipyards, including real-time planning, milestone monitoring tools, and the establishment of efficient production lines.
- Specialized Shipbuilding: India hopes to gain technical know-how in building specialized vessels, such as LNG carriers and oil tankers, to meet growing global demand.
The partnership could also include the development of ancillary units and the promotion of green shipping technologies, which are expected to play a crucial role in the future of global maritime trade.
Proposed Shipbuilding Policy and Government Support
In tandem with these collaborations, the Indian government is preparing to launch a comprehensive shipbuilding policy aimed at rejuvenating the country’s maritime industry. Key elements of this policy include:
- Ship Recycling Credit Note Scheme: This scheme would offer fleet owners—both Indian and global—a credit note equivalent to 40% of the scrap value of a ship being dismantled at Indian shipbreaking yards. The credit note can then be used toward the cost of constructing new vessels in Indian shipyards.
- Subsidies for Ship Construction: The proposed policy also includes subsidies for constructing conventional and specialized vessels, with higher subsidies for green ships and vessels using futuristic technologies.
- Maritime Clusters: The government plans to establish maritime clusters in Andhra Pradesh, Gujarat, and Odisha to support the growth of the shipbuilding industry.
Additionally, the establishment of a Maritime Development Fund (MDF) with an initial corpus of ₹25,000 crores will provide financial support to shipyards for expansion and new ventures.
Strategic Vision: Expanding India’s Global Maritime Influence
India’s shipbuilding ambitions are closely aligned with the country’s broader economic goals. As global seaborne trade continues to grow, particularly with the shift towards green technologies, India is positioning itself as a major player in the maritime industry. The country’s goal is to capture a larger share of the global market by 2030 and beyond, which would not only boost India’s shipbuilding capabilities but also generate significant economic growth.
India’s vision is not just about building more ships but also about increasing the country’s service GDP and creating more jobs within the shipbuilding sector. As India’s maritime needs continue to expand, the government aims to ensure that a significant portion of the required ships are built domestically rather than imported.
The Future of India’s Shipbuilding Industry
India’s shipbuilding sector is at a critical juncture. With the support of South Korean expertise and a robust policy framework, the country has the potential to significantly boost its shipbuilding capacity and global market share. By adopting advanced technologies, improving production efficiency, and expanding its infrastructure, India can emerge as a leading player in the global maritime industry.
As India continues to strengthen its partnerships with South Korea and other advanced shipbuilding nations, the country is well on its way to transforming its shipbuilding sector into a cornerstone of its economic growth and maritime influence.
Conclusion:
India’s collaboration with South Korea marks a pivotal step in its quest to transform its shipbuilding industry and expand its global market share. By addressing key challenges such as construction timelines, technical expertise, and high costs, India is poised to enhance its shipbuilding capabilities. With strong government support, strategic partnerships, and a focus on modern technologies, India is set to become a major player in the global maritime industry. These efforts will not only strengthen India’s shipbuilding capacity but also contribute significantly to its economic growth and maritime influence in the coming decades.
Refer:
Economic Times, Link to article
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