{"id":325728,"date":"2025-02-04T17:07:44","date_gmt":"2025-02-04T11:37:44","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=325728"},"modified":"2025-02-05T12:34:21","modified_gmt":"2025-02-05T07:04:21","slug":"indias-efforts-to-develop-its-maritime-sector","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/indias-efforts-to-develop-its-maritime-sector\/","title":{"rendered":"India&#8217;s efforts to develop its maritime sector"},"content":{"rendered":"<p><strong>Source<\/strong>: The post <strong>India&#8217;s efforts to develop its maritime sector<\/strong> has been created, based on the article \u201c<strong>Some wind behind the sails of India\u2019s shipping industry<\/strong>\u201d published in \u201c<strong>The Hindu<\/strong>\u201d on 4th February 2025.<\/p>\n<p><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\" wp-image-325809 aligncenter\" src=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/02\/Indias-efforts-to-develop-its-maritime-sector.png?resize=648%2C430&#038;ssl=1\" alt=\"India's efforts to develop its maritime sector\" width=\"648\" height=\"430\" srcset=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/02\/Indias-efforts-to-develop-its-maritime-sector.png?resize=300%2C199&amp;ssl=1 300w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/02\/Indias-efforts-to-develop-its-maritime-sector.png?resize=1024%2C680&amp;ssl=1 1024w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/02\/Indias-efforts-to-develop-its-maritime-sector.png?resize=768%2C510&amp;ssl=1 768w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/02\/Indias-efforts-to-develop-its-maritime-sector.png?w=1280&amp;ssl=1 1280w\" sizes=\"auto, (max-width: 648px) 100vw, 648px\" \/><\/p>\n<p><strong>UPSC Syllabus Topic:<\/strong> GS Paper3- Infrastructures<\/p>\n<p><strong>Context<\/strong>: The article discusses India&#8217;s efforts to develop its maritime sector through the Sagarmala program. Despite investments in ports, Indian shipping remains weak due to financial, regulatory, and tax challenges. Recent budget measures help, but more reforms are needed for real progress.<\/p>\n<p>For detailed information on <strong>India\u2019s Maritime Atmnirbharta<\/strong> <a href=\"https:\/\/forumias.com\/blog\/indias-maritime-atmnirbharta-explained-pointwise\/#:~:text=Maritime%20Domain%20Awareness%3A,to%20India's%20specific%20maritime%20needs.\">read this article here<\/a><\/p>\n<h2><strong>How is the government developing the maritime sector?<\/strong><\/h2>\n<ol>\n<li>The government has focused on improving the maritime sector through the <strong>Sagarmala program<\/strong>.<\/li>\n<li>As of <strong>September 2024<\/strong>, the program included <strong>839 projects<\/strong> requiring <strong>\u20b9<\/strong><strong>5.8 lakh crore<\/strong> by <strong>2035<\/strong>.<\/li>\n<\/ol>\n<ul>\n<li><strong>241 projects<\/strong> (\u20b91.22 lakh crore) are completed.<\/li>\n<li><strong>234 projects<\/strong> (\u20b91.8 lakh crore) are under implementation.<\/li>\n<li><strong>364 projects<\/strong> (\u20b92.78 lakh crore) are in development.<\/li>\n<\/ul>\n<ol start=\"3\">\n<li>The investment distribution is:<\/li>\n<\/ol>\n<ul>\n<li><strong>\u20b9<\/strong><strong>2.91 lakh crore<\/strong> (50%) for port modernization.<\/li>\n<li><strong>\u20b9<\/strong><strong>2.06 lakh crore<\/strong> (35%) for port connectivity.<\/li>\n<li><strong>\u20b9<\/strong><strong>55.8 thousand crore<\/strong> (10%) for port-led industrialization.<\/li>\n<li><strong>5%<\/strong> for coastal community development and inland water transport.<\/li>\n<\/ul>\n<h2><strong>How has India&#8217;s economy and trade grown?<\/strong><\/h2>\n<ol>\n<li>India\u2019s <strong>GDP<\/strong> increased from <strong>\u20b9<\/strong><strong>1.53 trillion (2016-17) to <\/strong><strong>\u20b9<\/strong><strong>2.72 trillion (2022-23)<\/strong>, with a <strong>7% annual growth rate<\/strong>.<\/li>\n<li>It is projected to reach <strong>$5 trillion by 2027<\/strong> and <strong>$7 trillion by 2030<\/strong>.<br \/>\n3. India\u2019s <strong>EXIM trade<\/strong> rose from <strong>$66 billion (2016-17) to $116 billion (2022)<\/strong>, growing <strong>12.83% annually<\/strong>.<\/li>\n<li>The goal is <strong>$2 trillion exports by 2030<\/strong>.<\/li>\n<\/ol>\n<h2><strong>Why is the Indian shipping sector not growing?<\/strong><\/h2>\n<ol>\n<li>Despite high investments, the Indian shipping sector remains stagnant.<\/li>\n<\/ol>\n<ul>\n<li><strong> Cargo handled at major ports<\/strong> increased only <strong>14.26% (2016-2021)<\/strong>, with <strong>2.85% annual growth<\/strong>.<\/li>\n<li><strong>Number of vessels handled<\/strong> decreased <strong>5.93%<\/strong>, from <strong>21,655 (2016-17) to 20,371 (2020-21)<\/strong>.<\/li>\n<li><strong>Indian-registered ships<\/strong> increased by <strong>16.77%<\/strong>, from <strong>1,313 (2016-17) to 1,526 (2024)<\/strong>.<\/li>\n<li><strong>Gross tonnage<\/strong> increased <strong>17.44%<\/strong> in the same period.<\/li>\n<\/ul>\n<ol start=\"2\">\n<li>India&#8217;s <strong>global ranking in ship ownership fell from 17 to 19<\/strong>.<\/li>\n<li>The fleet is aging, with the average vessel age <strong>improving from 26 years (2022-23) to 21 years (2024)<\/strong> due to the addition of <strong>34 younger vessels<\/strong>.<\/li>\n<\/ol>\n<h2><strong>What challenges does Indian shipping face?<\/strong><\/h2>\n<ol>\n<li><strong> Lack of capital<\/strong> and <strong>high borrowing costs<\/strong>.<\/li>\n<li><strong>Short loan tenures<\/strong> and <strong>rigid collateral rules<\/strong>.<\/li>\n<li><strong>Unfavorable taxation<\/strong>, making foreign ships more competitive.<\/li>\n<li><strong> High costs for training seafarers<\/strong> and <strong>higher port charges<\/strong>.<\/li>\n<li><strong>Limited shipbuilding capacity<\/strong>, <strong>high steel costs<\/strong>, and <strong>customs duties on spare parts<\/strong>.<\/li>\n<li><strong>Foreign-flag vessels<\/strong> benefit from <strong>low taxes and lenient regulations<\/strong>, making Indian ships uncompetitive.<\/li>\n<\/ol>\n<h2><strong>What reforms have been announced?<\/strong><\/h2>\n<p>The <strong>Union Budget 2025<\/strong> introduced several measures:<\/p>\n<ol>\n<li><strong>\u20b9<\/strong><strong>25,000 crore Maritime Development Fund (MDF)<\/strong> (government will contribute 49%).<\/li>\n<li><strong>Infrastructure status<\/strong> for large vessels.<\/li>\n<li><strong>Shipbuilding clusters<\/strong> and <strong>financial aid for shipbuilding<\/strong>.<\/li>\n<li><strong>10-year exemption on customs duty<\/strong> for shipbuilding spare parts.<\/li>\n<li><strong>Credit incentives for shipbreaking<\/strong>.<\/li>\n<li><strong>Tonnage tax extension to inland vessels<\/strong>.<\/li>\n<\/ol>\n<h2><strong>What needs to be done?<\/strong><\/h2>\n<ol>\n<li><strong>MDF funding is unclear<\/strong> (whether it will be available in one year or multiple years).<\/li>\n<li><strong>More investment is needed<\/strong> for ship replacement and green shipping technologies.<\/li>\n<li><strong> Fix Tax Disparities<\/strong>: <strong>5% IGST on Indian-flagged ships<\/strong> should be removed. <strong>TDS on seafarers&#8217; salaries<\/strong> should be eliminated.<\/li>\n<li><strong>Enhance Competitiveness<\/strong>: Reduce <strong>borrowing costs<\/strong>, provide <strong>long-term financing (7-10 years)<\/strong>, and ease <strong>loan collateral rules<\/strong>.<\/li>\n<li><strong>Improve Infrastructure<\/strong>: Expand <strong>shipyards<\/strong> and modernize <strong>existing ports<\/strong> under <strong>Sagarmala<\/strong>.<\/li>\n<\/ol>\n<p><strong>Question for practice:<\/strong><\/p>\n<p>Examine the key challenges hindering the growth of the Indian shipping sector despite significant investments and policy reforms.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: The post India&#8217;s efforts to develop its maritime sector has been created, based on the article \u201cSome wind behind the sails of India\u2019s shipping industry\u201d published in \u201cThe Hindu\u201d on 4th February 2025. UPSC Syllabus Topic: GS Paper3- Infrastructures Context: The article discusses India&#8217;s efforts to develop its maritime sector through the Sagarmala program.&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/indias-efforts-to-develop-its-maritime-sector\/\">Continue reading <span class=\"screen-reader-text\">India&#8217;s efforts to develop its maritime sector<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":325809,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230],"tags":[216,8184,10498],"class_list":["post-325728","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-9-pm-daily-articles","tag-gs-paper-3","tag-indian-economy","tag-the-hindu","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/02\/Indias-efforts-to-develop-its-maritime-sector.png?fit=1280%2C850&ssl=1","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/325728","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=325728"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/325728\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/325809"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=325728"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=325728"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=325728"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}