Samsung, Hyundai looking at Indian shipbuilding industry: Sarbanda Sonowal

Union Minister for Shipping, Ports and Waterways Sarbanda Sonowal is one of the few ministers in the Modi 3.0 Cabinet to have the same portfolio as that in the 2019-24 government. From bolstering Make in India in shipbuilding to reviving decades-old legislation in ports, Sonowal is opening up the Indian seas and ports to the world. In an interview with Dhruvaksh Saha and Shreya Jai in New Delhi, he talks of about the ministry’s plans. Edited excerpts:

 

The ministry is looking to have a busy Parliament session with four Bills expected to be passed. What do the new pieces of legislation propose for the sector? 

The Merchant Shipping Bill is one of the most advanced, innovative and credible legislation items which is going to be placed in the House. So this is going to empower India to develop its tonnage because earlier there were a lot of restrictions in registration of vessels, because of which no one was interested to come. Now, registration for non-resident Indians, overseas citizens of India, and joint ventures will be allowed. We have digitised the registration process. This is an opportunity for vessel owners to join hands and discover that India is the most suitable destination for investment. 

All international conventions have been complied with in areas like pollution, compensation, interests of seafarers, vessel standards, cruises, and provisions on marine pollution such as oil spills and environmental standards. 

We want to grow our economy, but not at the cost of the environment. By 2047, we want to be among the top five shipbuilding countries in the world. 

What is the policy on boosting shipbuilding in the country? 

We have the shipbuilding financial assistance policy. We are coming up with three additional pillars to support this. One is the second version of the policy, which offers higher assistance and a much more attractive tenure, among other things. This is in the proposal stage. Then there is the maritime development fund, which is also going to be approved soon. The third pillar is about ship-building capability development and capacity development, which envisages upscaling the development of common training infrastructure, common design centre, etc. 

 Has any player shown an interest in developing shipbuilding centres in India? 

Internationally, South Korea has shown a lot of interest. We are in talks with the people concerned there, and high-level delegations have visited the country. We are interacting directly with shipbuilders there, and we want to bring them here, so that we can have a presence of international standards. Japan has also shown an interest. 

Many states have shown an interest in shipbuilding and ship repair clusters that we had called for at the Maritime State Development Council. Andhra Pradesh has written to us, offering land and facilities. Gujarat, Maharashtra, and Odisha too are interested. 

Any private organisations looking to get into this space? 

Among global majors, Samsung Heavy Industries, Hyundai Heavy Industries, Hanwha Ocean (earlier Daewoo), HD Korea Shipbuilding and Engineering, Sejin Heavy Industries, and many others from South Korea have shown an interest. The high-level delegation there will take the discussion forward. 

Domestically, Swan Energy, which recently took over the Pipavav Shipyard, has shown an interest and is also in talks with global players to build large ships. Similarly, Chowgule Shipyard and SHOFT Shipyard are interested in our request for participation in shipbuilding and ship repair clusters.

 

We will provide any policy needs that international and national players have – incentives in the form of policy, amenities or finance. Of the Rs 80 trillion investment marked in Maritime Amrit Kaal Vision 2047, Rs 54 trillion is earmarked for shipbuilding. 

Nascent manufacturing industries often run into trouble due to the lack of a supply chain. Are there plans to avoid this? 

We need to develop ancillary industries to create a supply-chain ecosystem, which is why we have planned shipbuilding clusters. Developing ancillary industries does not require a seafront, whereas a shipyard needs a seafront. Hence, landlocked states will benefit from the development of these clusters. 

We have undertaken studies and found that shipbuilding creates an employment multiplier of 6.4, which means if you employ one person in a shipyard, it provides jobs to five more people outside it. Similarly, there’s an investment multiplier of around 2.

The sector can generate millions of jobs, and with upskilling and reskilling, ancillary industries can develop.

 

What are the government’s plans for inland waterways? 

Around 60 jetties have been constructed across the Ganga, and a dredging policy has come into effect. In the past, the main crisis of the Ganga was its draft depth. Now this problem will be addressed with a minimum assured draft, so that cargo and passenger vessels can move seamlessly. 

The condition for minimum depth has been built into the dredging contract, and the 1,420-km stretch between Varanasi and Kolkata has been awarded for dredging. 

Cargo on national waterways has increased from 30 million tonnes to 133 million tonnes in the past 10 years. 

On the cruise front, the MV Ganga Vilas has been a success and has been moving seamlessly. Seeing its success, nine more river cruises are in operation. Earlier, no one expected the Ganga to have successful cruises due to the lack of depth. There are also plans to incentivise transporting goods via inland waterways. 

What are the goals of the ministry for 2047? 

By 2047, our target is 10,000 million tonnes (currently it is 1,600 million tonnes). That is why we are going to develop all our ports so that we could accommodate those kinds of volumes of cargo, so we have to develop the whole ecosystem for storage as well. 

What is the status of Nicobar port? Has the government taken cognizance of ecological concerns? 

Deliberations are ongoing on the Galathea Bay project, and there will be some developments soon. Every sensitive issue related to the development of the port has been addressed. Our current environmental report is credible, and the environment ministry has taken note of every concern.  

I visited the area, and the locals welcomed me and are anticipating the development of the port. 

We will look at multiple operators for developing the port.

 

How can the government isolate Indian traders from global container crises and international volatility? 

Shipping Corporation of India is chartering vessels from Europe, and is also going to buy five second-hand vessels, aged around 10 years, to handle container volatility – these are 3,000-TEU handling vessels. For crude oil and other cargo, we are working with the cargo-owning ministries such as the petroleum ministry and are developing a framework where we jointly own a vessel for importing cargo. This model is based on a previous Shipping Corporation-Petronet collaboration, India LNG Transport Company.