The shipping ministry has proposed to develop shipbuilding clusters along the east and west coasts of India in an effort to revolutionise the country’s maritime economy according to Manufacturing Today. This project, which takes its cues from the prosperous marine clusters in China, Korea, and Vietnam, aims to stimulate shipbuilding and propel economic growth in India.
The proposal provides a strategic road map for the growth of these shipbuilding clusters, with a focus on finding suitable sites with at least 1,000 acres of land on both coastlines and waterfronts of 4-5 kilometres.
The goal is to establish three to four shipyards that match world standards for each cluster through collaborations with commercial organisations and the execution of the Sagarmala programme to finance essential infrastructure. The given plan provides for cooperation with leading shipbuilding companies around the world and primarily with South Korean and Japanese ones and the creation of subsidiary companies at the selected sites.
The aim of this kind of partnership is to enhance the ship industry in India since it shall be bringing in knowledge, modern technology, and market of ship building. At the same time the plan proves the need in the development of a solid body of regulation that would enable these clusters to receive orders from clients all over the world in order to ensure their competitive advantage in the global market.
Working capital loans have been requested by the shipping ministry from policed countries such as China and Korea in regard to low rates of interest. As Brazil has done, a Merchant Maritime Fund can be established to offer long-term loans with interest rates ranging from 4 to 6 per cent. Given that it is a sunrise sector, tax exemption for the first ten years may also be granted. It is possible to grant certain exemptions from paying customs duty on imported spare parts and to grant new shipbuilding yards a six-year income tax break.
As it is in the case of China, the centre can grant entrance, investment, and production subsidies to lower the cost of shipbuilding in India. Maritime special fund arrangements in other countries such as South Korea and Norway give incentives to the shipyard.
As for now, 95 per cent of the overall new building and repair is captured by China at 58 per cent, Japan 13 per cent, and South Korea 24 per cent. Other developing nations involved in this area are; Vietnam and Philippines.
