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Source: This post on Challenges of India’s Shipbuilding Industry has been created based on the article “India’s stationary course in the shipping value chain” published in The Hindu on 29th December, 2023.
UPSC Syllabus Topic: GS Paper 3 Indian Economy – Infrastructure
News: Despite having a strong maritime foundation, India has lagged behind China in shipbuilding.
China’s Yangtze River, intertwined with Chinese tradition, culture, and commerce, stands today as a proof of China’s modern achievements, especially with projects like the Three Gorges. The river is a hub of shipping activity, with massive merchant ships and smaller barges navigating its waters.
Why has India’s shipping Industry lagged behind China?
Historically, India had a tradition of modern ship-owning and was closely associated with the International Maritime Organization. Despite having a head start over China until the late 1980s, India has not capitalized on its early advantages.
Increasing labour supply instead of industry: It has been the major focus of successive governments to increase the foreign exchange earnings by the supply of labour. Similarly, in shipping as well, India’s focus has largely been on expanding the seafarer population rather than moving up the shipping value chain. In the past, Mumbai and Kolkata were the major centres of seafarer training and employment.
Resultantly, Indians have a good command over seafaring and their management companies. However, they are behind in ship owning, chartering, financing and building.
Government policies: India’s Maritime Agenda 2020 and the government’s Maritime India Vision 2030 have not adequately addressed the need for growth in shipbuilding and owning.
Despite having a strategic geographic location and a long coastline, India has not capitalized on these advantages to strengthen its position in the global maritime industry.
China’s policies: In stark contrast, China, with a dedicated government plan, has become a dominant player in shipbuilding, making half of the world’s ships by 2020. Chinese shipowners primarily build their ships at state-owned yards, showcasing a strong government-industry partnership.
What should be done?
For India to gain a significant position in the global maritime scene, it should focus on boosting ship owning, chartering, financing, and building.
This approach would not only enhance India’s role in international trade but also strengthen its strategic and military capabilities.
Question for practice:
Why has India’s shipping Industry lagged behind those of other countries such as China? What steps can be taken to revive it?
