Exciting Influx: Japanese and Korean Shipbuilders Eager to Invest in Thriving Market, Says Sarbananda Sonowal
India Poised for Shipbuilding Growth with Foreign Interest and Strategic Initiatives
Last Updated: Sep 16, 2024 | 12:25 AM IST
In what could prove a significant boost to India’s emerging shipbuilding industry, companies from Japan and South Korea have shown interest in investing in the sector, according to Union Minister of Ports, Shipping, and Waterways Sarbananda Sonowal. This potential investment could come in various forms, including direct investments, joint ventures, and technology sharing, underscoring the appeal of India’s shipbuilding initiatives.
In an interview following the recent Maritime State Development Council (MSDC) meeting, Sonowal revealed plans for developing shipbuilding clusters in collaboration with coastal states. India currently ranks 20th globally in shipbuilding with a mere 0.06% market share, compared to the 85% dominated by China, South Korea, and Japan.
The ministry aims to develop 2-3 shipbuilding clusters within the next decade and an additional 1-2 clusters in the subsequent five years. This phased approach allows for meticulous planning and resource allocation while addressing potential challenges.
Prominent players, including India’s largest port operator Adani Ports and Special Economic Zone, are keen on venturing into shipbuilding. The government’s efforts have prompted both state-run and private shipbuilders to expand their operations, potentially increasing shipbuilding capacity and technological capabilities.
To support this expansion, the central government will primarily finance capital support from a ₹30,000 crore Maritime Development Fund, with 49% funded by the Centre and the remainder by port authorities and private investors. The industry has emphasized the need for large land parcels with adequate waterfronts and channel depth for operational success.
Coastal states are set to formulate policies and incentive schemes to meet these logistical requirements. These could include land aggregation, expedited clearances, and financial incentives like subsidies and tax breaks.
The ministry is also investing in common maritime assets, such as dry docks and R&D centers, to reduce capital expenditure for individual companies and foster industry growth. This initiative aims to repurpose underutilized land within state maritime boards, ports, or industrial corridors.
India’s shipbuilding sector has faced challenges, with the share of cargo carried by Indian vessels dropping to 5.4% over the past decade. The ministry’s new strategies seek to reverse this decline and enhance the role of Indian-built ships in the domestic market. Previous government schemes have not met their targets, prompting the need for these renewed efforts.
First Published: Sep 16, 2024 | 12:25 AM IST
Original Story https://www.business-standard.com/industry/news/shipbuilders-from-japan-korea-keen-to-invest-here-sarbananda-sonowal-124091500507_1.html
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