Answer

Introduction

India’s shipbuilding sector, vital for trade, energy security, and maritime strength, has struggled despite policy support since 2015. With only a few small merchant vessels built in a decade, India lags far behind China, Japan, and South Korea, reflecting deep structural bottlenecks that demand urgent reforms for global competitiveness.

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Structural bottlenecks of the Indian shipbuilding industry

• Limited capacity for large merchant ships: India’s shipbuilding capacity remains minuscule, with only half-a-dozen small merchant ships built in the last decade.
  Eg: Despite defence orders sustaining some shipyards, India has not been able to build large vessels on the scale of Korea or China.
• Outdated infrastructure in shipyards: Indian yards lack long dry docks, 1,000-tonne cranes, and space for prefabricated block assembly, leading to delays.
  Eg: While Korean and Japanese yards complete keel-to-waterborne in 3-4 months, Indian yards take 2-3 years.
• Weak ancillary industry support: Absence of robust ancillary factories hampers supply chains, increasing costs and turnaround time.
  Eg: Unlike Chinese clusters that integrate component manufacturing, India faces delays due to scattered and weak ancillaries.
• Lack of skilled manpower and training institutions: India has not developed institutions for specialized shipbuilding training.
• Uncertain demand and financing constraints: Indian shipowners hesitate to invest due to cost overruns, delays, and lack of long-term contracts.

Measures to make shipbuilding globally competitive

• Upgrading shipyards with advanced technology: Investments in cutting-edge equipment, cranes, and modular construction will reduce delays.
  Eg: Adopting block prefabrication like Korean yards could bring turnaround time closer to one year.
• Creating shipbuilding clusters with ancillaries: Developing industrial clusters for components and spare parts would improve efficiency.
• Promoting small shipbuilding as a stepping stone: Starting with ships of 500 gross tonnage can gradually build technical capabilities.
• Linking shipbuilding with green energy policy: Leveraging green fuel projects in ports like Kakinada and Kochi to build green ships would create demand.
  Eg: Tying green fuel exports with construction of green-fuel powered ships will ensure offtake and boost orders.
• Ensuring long-term offtake contracts: Providing assured demand through shipping contracts will incentivize shipowners to place domestic orders.
  Eg: Time charters for coal imports by State-owned utilities or crude oil imports by oil companies can provide demand visibility for Indian yards.

Conclusion

India’s shipbuilding revival hinges on learning from past failures and focusing on efficiency, technology, and assured demand. Linking shipbuilding with green energy goals and adopting a phased approach starting with smaller vessels can help India reduce foreign dependence and gradually emerge as a globally competitive maritime hub.

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