Subsidies to help but shipyards must become globally competitive

Last week, the government approved a package of %69,725 crore to revitalise the shipbuilding industry and granted infrastructure status for building large vessels. It is a significant step forward given the government's ambitions that India should be among the top five ship building nations in the world by 2047.

- TNC RAJAGOPALAN

The financial package includes 24,736 crore under the shipbuilding financial assistance scheme (now extended till March 31, 2036), %20,000 crore for maritime development fund, %19,989 crore under the ship development scheme and 4,100 crore for ship breaking credit notes. It aims to improve long-term financing, promote greenfield and brownfield shipyard development, enhance technical capabilities and skilling, and create a robust maritime infrastructure, says the government.

Almost 90% of global cargo moves through the oceans with China, South Korea and Japan dominating the ship building industry aided by considerable support from their governments. The shipbuilding market is about $160 billion and is projected to grow at 4-5% to about $200 billion by 2030. India has less than 1% of the market share and order book, with most of the ships being relatively small and built for offshore support, navy, coastguard and coastal fishing and transport purposes.