India Seeks Investments from South Korea And Japan for Shipbuilding Clusters

Currently, India holds less than 1 per cent of the global shipbuilding market, dominated by China, South Korea, and Japan.

Ramachandran was in Goa to participate in the 20th Maritime State Development Council (MSDC), where plans for a mega shipbuilding park, spanning multiple states, were discussed.

Ramachandran also said that Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal has written to chief ministers of all states to provide land immediately if Japanese or Korean companies express interest in setting up shipbuilding and ship repair clusters in their states.

According to him, this ambitious initiative aims to consolidate shipbuilding capabilities across regions, fostering greater efficiency and innovation.

Ramachandran said India’s proposed Rs 25,000 crore Maritime Development Fund (MDF) — which looks at providing long-term, low-cost financial support and push towards indigenous ship-building — will be basically equity funding.

While pointing out that currently, 95 per cent of India’s foreign trade happens through foreign-owned and foreign-flagged vessels, which results in an outgo of $110 billion annually from India, Ramachandran said almost 60 per cent of the country’s ship repair work happens outside the country.

India’s fleet currently stands at 1,526 vessels with a gross tonnage (GT) of 14 million as of December 2023. However, about 44 per cent of these vessels are over 20 years old, indicating a need for replacement in the coming years.

Currently, India spends close to $75 billion annually on leasing ships from outside. India owns about 2 per cent of the world’s total tonnage.