Why in News: The Government has announced a ₹69,725 crore package to revitalise India’s shipbuilding and maritime ecosystem, replacing the 2015 policy (expiring March 2026), with a focus on upgrading shipyards, promoting ancillary clusters, and incentivising shipowners for new builds.
Context
- India built only a handful of merchant ships in the past decade despite defence orders sustaining some shipyards.
Challenges in Indian Shipbuilding
1. Infrastructure Gaps – Yards lack length, heavy cranes (1,000+ tonnes), and prefab capacity unlike Korean/Japanese/Chinese models.
2. Ancillary Bottlenecks – Weak ecosystem for component supply delays shipbuilding by 2–3 years, locking capital.
3. Low Capacity – Large merchant ship construction capacity remains negligible; plan aims for 4.5 million GT.
4. Finance Limitations – Cheaper loans (as infrastructure) apply only to large vessels, excluding small builds.
5. Demand Uncertainty – Shipowners avoid newbuilds due to cost overruns and lack of assured offtake.
Global Best Practices
- Prefabrication and modular assembly lines reduce construction cycle to 12 months.
- China’s integrated approach: manpower training institutions, ancillary clusters, and long-term policy alignment.
Way Forward
1. Shipyard Modernisation – Invest in cranes, modular docks, and digital ship design.
2. Ancillary Ecosystem – Develop supplier clusters, incentivise MSMEs in ship components.
3. Start Small – Focus on 500 GT+ vessels before scaling to large merchant ships.
4. Long-Term Offtake Contracts – Mandate coal/oil PSUs and green fuel exporters to place time-charters with Indian yards.
5. Human Capital Development – Maritime training institutes for design, engineering, and management.
Conclusion
Sustained shipbuilding requires not just subsidies but assured demand, ecosystem development, and global-standard infrastructure. Without long-term offtake guarantees, the ₹69,725 crore package risks repeating the failures of the 2015 policy.
UPSC Relevance
GS Paper 3 (Infrastructure & Economy): Importance of shipbuilding for trade, logistics, energy security, and Make in India.
Mains Practice Question
Q. “Without long-term offtake arrangements, India’s shipbuilding incentives risk repeating past failures.” Critically analyse in the context of the new ₹69,725 crore shipbuilding package (2025).