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The India Maritime Week, currently underway in Mumbai (October 27-31), celebrates a sector that was literally non-existent in government policies till just five years ago. However, it is now an ambitious statement of power.
As an example, for ten years the government of India had run a shipbuilding financial assistance scheme with a subsidy purse of Rs 4,000 crore. There had been almost no takers from any private enterprise for the scheme. Yet the same Shipbuilding Financial Assistance Scheme has been extended until March 31, 2036, with a total corpus six times more at Rs 24,736 crore.
Including other elements of support like the Maritime Development Fund, the purse has now been expanded to almost Rs 70,000 crore, from which the government expects a rich harvest. The package this time is expected to unlock 4.5 million gross tonnage of shipbuilding capacity, generate nearly 30 lakh jobs, and attract investments of approximately Rs 4.5 trillion.
Prime Minister Narendra Modi is expected to milk this theme in his address at the India Maritime Week this week. The word maritime has permeated beyond the shores. “2026 will be the ASEAN-India Year of Maritime Cooperation,” Modi said in his speech at the ASEAN-India Summit on Monday.
So many maritime references mark a colossal change from a sector that was a somnolent part of the Indian infrastructure story for a long time. The Ministry of Ports, Shipping and Waterways (MoPSW) itself got a Cabinet minister and its present nameplate as recently as November 2020.
The scale of investment now expected is big for the ministry, even though it has grown sharply in recent years. From a budget allocation of Rs 1,387.7 crore in FY21 (actuals), the number has reached Rs 3,470.6 crore in FY26 (budget estimates), a healthy 20.12 per cent growth rate of CAGR. But the numbers pencilled in by the Union Cabinet are several times larger, even over a ten-year period.
What has changed? For one, the MoPSW has a business plan that recognises what it takes for business to invest in the sector. But the key challenge is that there is no regulator for the sector to provide continuity to those business plans. It is not the only transport sector that faces this challenge. Neither the railways nor air transport has a full-fledged regulator (there is one for airports), and it is no surprise that in both, private investment has been erratic.
The need for long-term continuity is underlined by experts. “For this vision to succeed, MoPSW’s shipping vision must move from policy to practice; there is a long list of must-dos. While JVs with global shipyards bring scale and expertise, equal attention is needed for smaller shipyards and coastal operators. Timely access to MDF equity, soft lending, and coastal infrastructure reforms will help small shipowners and boost domestic cargo movement,” said Captain MM Saggi, former nautical adviser to the government.
Neither the Maritime India Vision 2030 nor the larger Maritime Amrit Kaal Vision 2047, the policy documents of the MoPSW, are explicit on this reform.
Even though these structural reforms are not discussed yet, the MoPSW seems willing to loosen control over both investment into ports and in shipbuilding. Prime Minister Modi is particularly keen to get the latter going; it is also the more difficult to pull off.
The global market for ships is dominated by China, again a result of efforts made over decades. The Chinese shipbuilding industry grew to scale when the US lost interest in building ships and Europe withdrew over pollution concerns.
Experts reckon that India will have to first hone its skill in ship repair, which in turn will serve as a training ground for both labour and capital to invest in building the container ships that Modi wants India to build. The Prime Minister wants India to be among the top five shipbuilders by 2047. It currently ranks 16th in the world as per UNCTAD data, at 0.06 per cent of the gross tonnage of all ships built globally. Even if it reaches 1 per cent, that will be just ahead of the Philippines and short of Vietnam. The leader is China at 54.57 per cent, followed by South Korea at 28.02 and Japan at 12.56 per cent.
“There is no doubt we shall get it right this time,” said a senior MoPSW official. The India Maritime Week will be expected to offer some ideas on how to reach the landmarks. A key feature of comfort is that it is not only one ministry pulling in the business.
The event this time is also tied to a Quad initiative hosted by the Ministry of External Affairs at the same time, in the city. The key theme of the Quad event is, appropriately enough, Ports of the Future Partnership, meant to draw in investment into ports, shipbuilding, and expanding the flow of finance into the sector.
Even then, however, there could be dead ends. There is hardly any discussion this time about the big theme of 2023 — the India-Middle East Economic Corridor (IMEC) — which was the dominant theme in the first edition. It was also the point where India seemed to have established a connectivity bridge with Bangladesh using the huge sea and riverine links between the two countries.
Instead, attention this time is focused on the nuts and bolts — literally — of how to construct ships and anchor them at large terminals. It has helped that India’s first transshipment port at Vizhinjam has finally become operational. The port has already handled one million tonnes of cargo in just nine months of operation. Last year, the Union Cabinet gave approval for the construction of India’s first deep-draft port at Vadhavan on the west coast. The elements of the maritime policy are coming into play.
