Reimagining Indian Shipbuilding: From State Support to Market Leadership

"The transformation of India's shipbuilding / ship repair industry into a market-led, innovation-driven sector is not just possible; it is imperative"

- Capt Ramji S KrishnanSloan Fellow, London Business School

Capt Ramji S KrishnanSloan Fellow, London Business School

The mounting crisis in Indian shipbuilding—exemplified by the collapse of prominent private shipyards like Bharti, Pipavav, and ABG into non-performing assets—reveals not just individual business failures but the fundamental limitations of state-directed industrial development. As public sector banks retreat from lending even to infrastructure-designated shipyards, we face a crucial moment of choice: continue down the path of increasing state support or embrace a fundamental transformation of the sector through market-driven innovation.

SUBSIDY-DRIVEN EMPLOYMENT: A COMPARATIVE ANALYSIS OF CHINA, SOUTH KOREA, AND JAPAN:

The narrative of employment generation through subsidies in China's shipbuilding industry parallels the experiences documented in South Korea, where the focus on production targets over market-driven innovation has led to a lack of sustainable job growth. Research from the Stanford Centre on China's Economy and Institutions suggests that while subsidies have temporarily boosted employment figures to meet government-set quotas, these gains are often fleeting. The emphasis on volume rather than value does not foster the creation of long-term, skilled positions essential for industry resilience and competitiveness. This pattern highlights employment as more a response to policy directives than to market demand, echoing the critique of how subsidies can lead to market distortions.