Image Courtesy:Mapsofindia
Indian coastline stretches about 5700 kms on the mainland and about 7500 kms including the two island territories. With vast coast line, Indian Shipping Industry needs to develop more.
1.The overall Indian Shipping Scenario:
- With capacities in traditional shipbuilding nations such as Japan, South Korea and Norway booked for the next few years, global fleet owners have started looking at new destinations such as China, India and Vietnam to build their ships.Indian firms are increasingly getting into ship building and repairing as shipbuilding orders are expected to rise significantly to meet the boom in seaborne trade and increased offshore oil exploration.
- India currently has a market share of just 0.5% of the global shipbuilding market. Indian yards such as ABG Shipyard Ltd., Bharati Shipyard Ltd., Larsen & Toubro, Cochin Shipyard Ltd., Hindustan Shipyard Ltd., Mazagon Dock Ltd. and Tebma Shipyards Ltd. are looking to grab a bigger share of the global market and capture the space vacated by the closure of yards in Europe and other developed countries.
- Though India has 28 ship building yards, the largest ship built in the country is a 45,000 DWT vessel at Kochi Shipyard and none of the country’s shipyards have the capability to manufacture high-tech or sophisticated ships.
- Steel maker JSW is also planning to set up a shipbuilding facility either in Gujarat or in Maharashtra.
- India’s shipbuilding industry is expected to touch the $20 billion milestone by 2020, from close to $5 billion now which is about 1 percent by value of total global shipbuilding orders. Consequently, Indian ship builders are expanding their capacities with buyouts of other yards and assets. Shipping and engineering firms are also planning to set up shipbuilding yards to exploit the sector’s surging potential.
- Apart from existing players, the Tata Group, Shipping Corp. of India Ltd., the Jindal Group, Mercator Lines Ltd., Shapoorji Pallonji & Co. Ltd. and the Adani Group are also entering the shipbuilding business. The Gujarat state-controlled Gujarat Maritime Board is planning to set up 100 shipyards in 10 industrial clusters in the next five years. Garware Offshore has so far sold four designs to ABG Shipyard. The company has plans to set up a knowledge process outsourcing centre in India in collaboration with Havyard, which will design all types of marine assets. At present, Havyard is building two offshore ships for Garware Offshore.
- Engineering firm Larsen & Toubro already has one ship building yard in Gujarat state and plans to invest about $378.7m (15 billion rupees) for shipbuilding and a repair yard.
- Gujarat-based Adani group is setting up a ship building and repair yard at a cost of about $252.5m (10 billion rupees).
- Reliance Industries also plans to spend $2 billion on shipbuilding and dredging.
- Besides the location advantage that India enjoys since a large number of vessels sail through this part of Asia, Indian steel mills have started manufacturing steel plates used in shipbuilding.Earlier, shipbuilding steel used to be imported. Essar Steel is already manufacturing shipbuilding steel and plans to increase it with the commissioning of a 1.5-million-tonne plate plant in Gujarat next year.
- The government provided a 30-percent subsidy on value of ships built by Indian yards, which would sail under a foreign flag. The industry hopes this would be extended to help compete with their overseas competitors. This subsidy is also given to certain ships built for the local market. ABG Shipyard and its competitor Bharati Shipyard, which builds sophisticated offshore platform supply vessels, have started building rigs.
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