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India’s stationary course in the shipping value chain

  • Category
    Economy
  • Published
    6th Jan, 2024

Context

Boosting ship owning, chartering, financing and building would not only push India o the centre of the global maritime industry but also enhance its international trade presence.

The Yangtze River's Role in China's Maritime Dominance

  • The Yangtze River has been integral to China's history, blending tradition, commerce, and culture.
  • Today, it remains a lifeline for modern China, symbolized by the Three Gorges project.
  • The Yangtze showcases a unique spectacle of massive merchant ships navigating in parallel convoys, emphasizing China's prowess in engineering, logistics, and shipping.

India v/s China

  • India was ahead in maritime capabilities until the late With a tradition of ship-owning and a strong presence in the International Maritime Organization, India had a promising start.
  • India's growth in the maritime sector focused on supplying labor to the global market. English-speaking Indian seafarers became commonplace, contributing to safety in the industry.
  • Indians evolved into ship management, showcasing talent for value engineering.
  • Indians managed companies contribute significantly to foreign exchange earnings, estimated at $6 billion annually.

India's Challenges

  • Stagnation in Ship Owning and Building:
    • India struggles to move up the shipping value chain, with ship owning, chartering, financing, and building largely inaccessible.
    • China, on the contrary, dominates global shipbuilding, producing half of the world's ships by 2020.
  • Government Support: China's dedicated government plan propels shipbuilding and owning. Chinese shipowners primarily build ships at stateowned yards, ensuring control over the entire value chain.

Government Initiatives and Policy Gaps in India

  • Maritime Agendas: Previous and present governments introduced maritime agendas. However, India's share in global shipbuilding dropped, and Maritime India Vision 2030 lacks a concrete plan for shipbuilding and owning.

Maritime Vision Document 2030: It is a 10 Year blueprint on India’s vision of a sustainable Maritime sector and vibrant blue economy.

  • Sagarmala Initiative: While Sagarmala focuses on port infrastructure, naval ship orders dominate, neglecting the potential of shipbuilding for economic and strategic growth.

The Strategic Imperative for India in Shipbuilding

  • Integral to Industrial and Naval Power: Shipbuilding is essential for strengthening both industrial and naval power. It provides a seat at the global maritime table and enhances India's presence in international trade.
  • Military Significance: A robust shipbuilding industry is integral to a strong naval base. Nagasaki's shipyard, chosen as a target during World War II, exemplifies the intertwined nature of naval strength and shipbuilding capabilities.
  • Economic Competitiveness: Improved shipping infrastructure enhances India's role as a global trade hub, boosting economic growth and expanding export opportunities.
  • Geopolitical Significance: India's strategic coastal position makes robust shipping infrastructure vital for geopolitical influence and ensuring national security.
  • Employment and Skill Development: Developing shipping infrastructure generates employment for seafarers, addressing unemployment challenges and promoting skill development.
  • Integrated Supply Chains: Efficient shipping infrastructure reduces logistics costs, enhancing industrial competitiveness and attracting domestic and foreign investments.
  • Regional Connectivity and Trade Facilitation: Improved infrastructure fosters regional trade partnerships and strengthens diplomatic ties.

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