In a bid to promote the Make in India initiative and to give a major push to Shipbuilding Industry in the country, the Indian Navy is jointly organizing an international seminar on ‘Nation Building Through Shipbuilding’ in association with industry body FICCI later this month from 25 to 26 July.
Vice Admiral A K Saxena, Controller of Warship Production & Acquisition (CWP&A), said at a curtain-raiser for the seminar that Shipbuilding has been identified as a key strategic sector under the ‘Make in India’ initiative of the Indian Government.
He said the navy could have more than 50 per cent indigenous content in the next-generation submarines. The Ministry of Defence had floated an Expression of Interest to several Indian companies on 20 June to make six submarines under the programme – Project 75-I. Vice Admiral Saxena said once Project 75-I is completed, India would have the capability to make her own submarines.
Vice Admiral Saxena said “India has developed a national capability to design and build world class warships and submarines, we need to design and build our strengths in merchant marine with vessels for inland waterways, coastal ships and specialised merchant ships in long term. Also, though a fair amount of technology and indigenisation has been achieved, additional capacities and new capabilities for rapid growth of sector are required to be nurtured.”
He added, “With increased competitiveness of indigenous industry coupled with inherent design strengths, reduction in costs, timeliness of production and improvements in quality of ships can be garnered to attract revenue from global markets.”
Advisor FICCI, Commodore Sujeet Samaddar (Retd) said that going by world history, no nation has achieved great power status unless it has an indigenous shipbuilding capability. Shipbuilding has a direct relationship with nation building, he said.
“Shipbuilding leads to job creation and this is the key needs for our country. There is no other industry with a higher multiple of job creation than the shipbuilding industry. Most estimates quote that one job in a shipyard results in 60-65 jobs outside in direct employment,” he said, adding generation of indirect jobs is far higher.
Vice Admiral echoed Cmde Samaddar and reiterated that, “A vibrant shipbuilding industry contributes to national GDP and generates substantial business and employment opportunities at both the upstream and downstream ends. Accordingly, shipbuilding has been identified as a key strategic sector under the ‘Make in India’ initiative of the Indian Government. Shipbuilding growth leads to spin offs for other industries, such as steel, electrical & engineering equipment, port infrastructure, trade and shipping services. Being labour intensive, shipbuilding industry offers much more potential for employment generation when compared to automobile, infrastructure and other industries.”
He further added, “Whilst the order books of Indian Shipyards for warship building projects have been supported by India Navy and Coast Guard, there is a need to enhance our competitiveness in manufacture of indigenous ship-borne equipment to generate the required volumes for long term sustenance of the Industry. Being a capital intensive infrastructure industry, this sustenance, in long term, for Indian shipyards and OEMs of systems and equipment is possible, only if we become globally competitive and diversify to build ships and ship-borne equipment for merchant marine.”
In the last few years the Government of India has unleashed a slew of initiatives to promote shipbuilding and shipping in India. The shipping industry was conferred ‘infrastructure’ status in 2016, a ship finance scheme was put in place and the sector was opened to 100 per cent FDI, but, the industry is yet to garner momentum. India pays out about US$ 50-60 billion for imports on foreign hulls, only 7 per cent of Indian EXIM cargo is carried on Indian ships and the sector has not attracted any significant FDI yet and the India’s mercantile fleet amounts to only 0.1 per cent of the global fleet.
Currently, India is forced to relax cabotage as indigenous capacity to carry the VLCC (Very Large Crude Carrier) products and crude carriers, container ships, LNG (Liquefied Natural Gas) ships, dredgers, deep sea fishing vessels, oceanographic vessels and modern riverine transports which are vital for the balance growth of the economy and national security, due to lack of demand within the country and zeal to develop the required design and technology for these ships.
It is apparent that shipbuilding requires strong government support for its initial growth and sustainability on the same lines as was done in the USA, Japan, South Korea and China. More recently, Vietnam and Philippines have put shipbuilding on the national agenda and rank far ahead of India in terms of shipbuilding, though India has better capacity, capability and skill sets in shipbuilding than both these countries.
According to FICCI, with India’s economy now being driven on a strong EXIM model and a revival of interest in coastal and inland transportation there is a definite need to revisit the sector. India must regain its pre-eminent position as a great shipbuilding nation and the opportunity exists in terms of size, scale and scope, to make this a reality today and therefore should be seized.
As Cmde Samaddar put across, there is a growing realisation that public-private partnership is the way forward. Commenting on the need to build our own shipbuilding industry, he said, “If we have to be a 5 trillion dollar economy, we need to make car-carriers as we export four million cars and we need to make cargo carriers.