India to boost shipbuilding industry with new incentive scheme

India to boost shipbuilding industry through a newly announced scheme by the Ministry of Ports, Shipping and Waterways (MoPSW), aims to significantly elevate the country’s position in the global market. This strategic initiative is designed to propel India from its current 22nd place in shipbuilding rankings to the top 10 by 2030 and the top five by 2047. The scheme, which extends until 2035, aligns with the Maritime India Vision (MIV) 2030 and the Maritime Amrit Kaal Vision 2047, positioning India as a formidable global maritime player.

T.K. Ramachandran, Secretary of Ports, Shipping and Waterways, confirmed the details of this scheme in a recent statement to PTI. He highlighted the government’s commitment to offering a range of incentives to stimulate growth within the shipbuilding sector. This initiative not only seeks to bolster India’s standing on the world stage but also aligns with broader goals to strengthen the maritime industry as a key component of India’s economic development.

India to Boost Shipbuilding Industry: Incentives for Green Technologies

A crucial aspect of the new scheme involves promoting environmentally sustainable practices within the shipbuilding industry. Ramachandran announced that the government will provide substantial financial assistance for vessels utilizing green fuels. Specifically, ships powered by methanol, ammonia, or hydrogen fuel cells for main propulsion will receive 30% financial support. Additionally, vessels equipped with fully electric or hybrid propulsion systems will benefit from 20% financial assistance. This move underscores the government’s dedication to advancing green shipping technologies and supporting the global shift towards decarbonization.

The emphasis on green technologies reflects India’s commitment to addressing environmental challenges while enhancing the competitiveness of its shipbuilding industry. By incentivizing the adoption of clean energy solutions, the government aims to align with international environmental standards and make Indian shipyards more attractive to global customers seeking sustainable shipping options.

India to Boost Shipbuilding Industry: Addressing Challenges and Opportunities

Despite having 32 shipyards and an extensive coastline, India’s shipbuilding industry faces several challenges that have hindered its growth. Inadequate policy support, limited private sector involvement, and inefficiencies at the firm level have contributed to the industry’s struggle to compete with global leaders. In contrast, countries like South Korea, China, and Japan dominate the global shipbuilding market, holding over 90% of the market share. These nations have achieved their leading positions through substantial government support, foreign investments, and robust research and development (R&D) initiatives.

The global shipbuilding market is currently experiencing a shortage of capacity, with shipyards in China, South Korea, and Japan fully booked until 2028. This scenario is prompting fleet owners to explore alternative manufacturing sites, presenting a significant opportunity for India to capture a larger share of the market. Furthermore, the increasing demand for green ships to meet global decarbonization targets could drive additional growth for the Indian shipbuilding sector.

The new scheme’s strategic focus on enhancing shipbuilding capabilities and promoting sustainable practices aligns with the growing global emphasis on environmental responsibility. It is estimated that over 50,000 new vessels will be required in the next 30 years to replace existing fleets, creating a substantial market opportunity for India. The potential economic impact of this initiative is significant, with projections suggesting that the Indian shipbuilding industry could be worth $62 billion by 2047. Additionally, ancillary industries related to shipbuilding could contribute an extra $37 billion, generating around 12 million jobs.

In conclusion, India’s new scheme to boost the shipbuilding industry represents a crucial step towards strengthening its position in the global market. By focusing on incentives for green technologies and addressing existing challenges, the government aims to propel India to a leading role in the shipbuilding sector. As the industry evolves and adapts to new opportunities, the scheme’s success will be pivotal in realizing India’s maritime ambitions and fostering long-term economic growth.

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