Modi to Launch Major Shipbuilding Initiatives in Gujarat
Prime Minister Narendra Modi is set to unveil significant initiatives aimed at revitalizing India’s shipbuilding industry on September 20 in Bhavnagar, Gujarat. This event marks a pivotal step towards India’s ambition of becoming one of the top five shipbuilding nations by 2047. Key announcements will include a ₹25,000 crore Maritime Development Fund and a revamped financial assistance scheme to bolster local shipbuilding efforts.
Transformative Initiatives for Shipbuilding
During the upcoming event in Bhavnagar, Prime Minister Modi will announce a comprehensive policy package designed to enhance India’s shipbuilding capabilities. Central to this initiative is the establishment of a ₹25,000 crore Maritime Development Fund (MDF), which aims to provide financial support to the local shipbuilding sector, a vital source of employment. The revamped Ship Building Financial Assistance (SBFA) scheme will offer increased financial aid for constructing ships, with assistance rates set at 15% for standard vessels, 20% for specialized ships, and 25% for environmentally friendly vessels.
Additionally, the government plans to grant infrastructure status to larger ships, facilitating easier access to long-term, low-cost financing for fleet owners. This strategic move is expected to significantly boost the maritime manufacturing ecosystem and create numerous job opportunities. The Ministry of Ports, Shipping and Waterways emphasizes that these initiatives align with India’s Amrit Kaal Vision 2047, which envisions a new era of growth and innovation in the maritime sector.
Modi’s choice of Bhavnagar, known for its extensive shipbreaking facilities, underscores the government’s commitment to revitalizing the shipbuilding industry, which currently holds a mere 0.06% share of the global market. The aim is to elevate India’s ranking from 16th to among the top 10 shipbuilding nations by 2030 and the top five by 2047. To achieve this, India will require substantial investments, including $18 billion for shipbuilding and repair, and $388 billion to expand its shipping tonnage.
Innovative Recycling and Global Partnerships
A key component of the new initiatives is the introduction of a ship recycling credit note scheme. Under this program, fleet owners will receive a credit note equivalent to 40% of the scrap value of ships dismantled at Indian recycling yards. This credit can be applied towards the construction of new vessels, incentivizing both domestic and international fleet owners to engage with Indian shipbuilders.
The ship recycling industry in Alang, which employs thousands, is poised to benefit from this scheme, especially as demand for environmentally friendly ship recycling grows. With over 50,000 ships expected to be built in the coming decades, the credit note initiative aims to stimulate local shipbuilding and create hundreds of thousands of jobs.
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Moreover, international interest in collaborating with Indian shipyards is on the rise. Notable partnerships include a Memorandum of Understanding (MoU) between Cochin Shipyard Ltd and South Korea’s HD Korea Shipbuilding & Offshore Engineering Co. Ltd, aimed at fostering long-term cooperation in shipbuilding. Such collaborations are crucial for India to capitalize on the ongoing global shipbuilding boom, which emphasizes green technology and decarbonization.
As the Bhavnagar event approaches, the government is set to lay the foundation for a series of shipbuilding clusters across various states, including Gujarat, Andhra Pradesh, Odisha, Tamil Nadu, and Maharashtra. These clusters will be supported by both government and private investments, further solidifying India’s position in the global maritime landscape.
