Revitalizing Indian Shipbuilding: Beyond Financial Incentives to Structural Reforms
UPSC Relevance
Prelims: Indian Economy (Infrastructure - Ports & Shipping, Make in India, Sagarmala Project).
Mains:
General Studies Paper 3 (Economy/Infrastructure): Infrastructure: Energy, Ports, Roads, Airports, Railways etc.; Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment; Changes in industrial policy and their effects on industrial growth.
Key Highlights from the News
The government has announced a new financial package of ₹69,725 crore to revive India's shipbuilding sector.
However, the article warns that this package is likely to fail, just like the 2015 package, because it does not address the fundamental problems in the sector.
Key Problems:
Indian shipyards are far behind countries like Korea and China in technology and efficiency.
Ship construction taking 2-3 years leads to significant financial losses.
Ancillary industries required for shipbuilding are weak.
Most importantly, the lack of long-term offtake possibilities for ships built in India is why Indian shipowners do not place orders with Indian shipyards.
The article suggests that this demand problem can be solved by government-owned energy and oil companies providing long-term shipping contracts for Indian-built ships for their imports.
India is also not utilizing the opportunity to build green ships to transport green fuels, even as it aims to export them.
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