Shipbuilding has the potential to strengthen the mission of ‘Aatmanirbhar Bharat’: Economic Survey

Source: The post is based on the article “Shipbuilding has the potential to strengthen the mission of ‘Aatmanirbhar Bharat’: Economic Survey” published in The Hindu on 1st February 2023.

What is the News?

According to the Economic Survey 2023, shipbuilding has one of the highest employment multipliers and is capable of generating mass employment in remote, coastal and rural areas.

What is the importance of the Shipbuilding Industry in India?

Strategic importance: Shipbuilding industry is a strategically important industry due to its role in energy security, national defence and the development of the heavy engineering industry.

Highest employment multiplier: Among manufacturing activities, shipbuilding has one of the highest employment multipliers of 6.48 and is capable of generating mass employment in remote, coastal and rural areas.

– For instance, the recently commissioned aircraft carrier INS Vikrant alone engaged approximately 500 MSMEs, 12,000 employees from ancillary industries, and 2,000 shipyard employees.

Contribution to Indian Economy: A study undertaken by the Navy for the construction of seven P17A ships reveals that around three-fourths of the total project cost of warships is invested back into the Indian economy.

This investment is ploughed back into the economy through indigenous sourcing of raw materials, development of equipment and systems installed onboard ships and other manpower services.

An indigenous shipping and shipbuilding industry can also reduce freight bills and forex outgo, thus reducing the current account deficit.

Collaborative production system: Shipbuilding has links to other ancillary industries including steel, engineering equipment, port infrastructure, trade and shipping services which have the potential to create a collaborative production ecosystem.