India seeks investment from S Korea, Japan to set up shipbuilding clusters | News
India is seeking investments and technology transfer from South Korea and Japan to establish shipbuilding and ship repair clusters to promote the domestic shipping supply chain in the country, according to a senior government official.
Currently, India holds less than 1 per cent of the global shipbuilding market, dominated by China, South Korea, and Japan.
“We are looking at South Korea and Japan for investments and technology transfer for establishing shipbuilding and ship repair clusters in India,” TK Ramachandran, Secretary in Ministry of Ports, Shipping and Waterways (MoPSW), told a group of journalists here.
Ramachandran was in Goa to participate in the 20th Maritime State Development Council (MSDC), where plans for a mega shipbuilding park, spanning multiple states, were discussed.
“We have communicated to them (South Korea and Japan) that you come with your technology and investments, we will provide you land for setting up shipbuilding and ship repair clusters,” he said.
The secretary said an Indian delegation has met with authorities and entities in South Korea to assess their interest in investing in India towards setting up shipbuilding and repair facilities at its proposed mega shipbuilding parks. A similar exercise is proposed for Japan to gauge their interest in shipbuilding in India.
Ramachandran also said that Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal has written to chief ministers of all states to provide land immediately if Japanese or Korean companies express interest in setting up shipbuilding and ship repair clusters in their states.
“At least three states have expressed interest in providing land for establishing shipbuilding and ship repair clusters,” he said, without naming the states.
Ramachandran noted that India wants to replicate in the domestic shipbuilding industry the automobile revolution that began with wooing Japanese carmaker Suzuki Motor Corp. in the 1980s to establish Maruti Suzuki India Ltd.
The ministry’s aim is to lift India from its 22nd position in global shipbuilding to be among the top 10 shipbuilding hubs by 2030 and top 5 by 2047, he added.
The secretary hinted that South Korea’s Hanwha Ocean Co. Ltd and Samsung Heavy Industries and Japan’s Mitsubishi Shipbuilding Co. Ltd and Mitsui Engineering are possible candidates for putting up shipbuilding and repairs infrastructure in the country.
According to him, this ambitious initiative aims to consolidate shipbuilding capabilities across regions, fostering greater efficiency and innovation.
Ramachandran said India’s proposed Rs 25,000 crore Maritime Development Fund (MDF) — which looks at providing long-term, low-cost financial support and push towards indigenous ship-building — will be basically equity funding.
“The equity funding will come from the Centre, PSUs, pension funds and private sector,” he noted.
While pointing out that currently, 95 per cent of India’s foreign trade happens through foreign-owned and foreign-flagged vessels, which results in an outgo of USD 110 billion annually from India, Ramachandran said almost 60 per cent of the country’s ship repair work happens outside the country.
“The financing ecosystem (for the shipping industry) is not there in India. Entire value chain financing, insurance, ownership of ships, leasing, recycling and repairs of ships happens abroad,” he said.
India’s fleet currently stands at 1,526 vessels with a gross tonnage (GT) of 14 million as of December 2023. However, about 44 per cent of these vessels are over 20 years old, indicating a need for replacement in the coming years.
Currently, India spends close to USD 75 billion annually on leasing ships from outside. India owns about 2 per cent of the world’s total tonnage Maritime India Vision 2030 (MIV 2030) aims to move India’s shipbuilding and ship repair ranking into the top 10 globally while Amrit Kaal Vision 2047 sets an even more ambitious goal of reaching the top five.
According to an official statement, if the tremendous demand stemming from the needs of the Indian shipping market is adequately targeted by Indian shipyards, it may result in an opportunity to the extent of over USD 237 billion (around Rs 20 lakh crore) by 2047.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Sep 15 2024 | 8:08 PM IST
