Indian maritime sources, euphoric over the recent French shipping line CMA CGM’s shipbuilding contract to Cochin Shipyard Limited (CSL) in Southern India, have portrayed India as the new kid on the block in the ship-building sector, have portrayed India as the new kid on the global shipbuilding block.
Deal marks first global liner shipbuilding order placed at an Indian yard
CMA CGM signed a letter of intent with Cochin Shipyard Ltd (CSL) to build six LNG-powered feeder containerships, marking the first-ever order by a global liner operator at an Indian yard. The total value of the vessels, each with a 1,700 TEU capacity, is around $300 million.
Shipping circles following the CMA CGM path in India suggest the design is expected to draw on an existing HD Hyundai Heavy Industries platform, following Cochin Shipyard’s cooperation agreement signed with the South Korean shipbuilder earlier this year.
CMA CGN has maintained close maritime ties with India for 34 years.
In addition to shipping, CMA CGM holds stakes in strategic Indian ports, including Nhava Sheva Freeport Terminal in Navi Mumbai and Mundra Port in Gujarat.
The group’s Global Business Services (GBS) hub in Chennai supports 160 agencies globally, employing over 9,000 people and managing over 60% of the Group’s core transactional functions.
CEVA Logistics, CMA CGM’s logistics subsidiary, operates across 105 sites in 31 Indian cities, managing nearly 900,000 sq/m of warehouse space. Its 2023 acquisition of Stellar VCS further strengthened its contract logistics presence in the country.
Despite having a thriving shipbuilding industry, India has yet to make a mark on the global shipbuilding market, as China, South Korea, and Japan have. India trails far behind the three Asian shipbuilding nations; the Indian government is now aggressively promoting the country’s shipbuilding industry, and wants India to be among the world’s top ten shipbuilding nations by 2030 and indeed among the top five by 2047, as outlined in the Maritime India Vision 2030, an initiative aimed at boosting India’s maritime sector through expansion/modernization of India’s port infrastructure, shipbuilding, advancing sea-trade connectivity, upgrading technology for improving maritime sector.
CMA CGM deal boosts India’s global shipbuilding ambitions
India has been constructing ships, ranging from small boats to large commercial tankers and naval vessels.
The CMA CGM contract did not surprise some Indian experts who had been expecting it since Prime Minister Narendra Modi, accompanied by French President Emmanuel Macron, met with the CMA CGM chief executive Rodolphe Saadé at the shipping line’s headquarters in Marseille some time back.
India’s shipbuilding industry was concentrated, mostly, in the coastal regions, particularly Gujarat, Bengal, and Odisha. These ancient shipbuilding centers facilitated historic trade with Southeast Asia, Africa, and West Asia. New shipbuilding yards such as the Mazagaon Dock Limited (MDL) in Mumbai emerged during the British colonial period; MDL was established primarily to build vessels for the British navy and merchant fleets. Indeed, both MDL and CSL are important players in building ships for the Indian navy, and the commercial sectors.
Nevertheless, India has merely a small fraction of the global shipbuilding market, which is dominated by China, South Korea, and Japan. India has about a dozen companies engaged in various forms of shipbuilding and vessel repairs/modifications. Modi’s government has announced plans to build multiple shipbuilding clusters in collaboration with coastal states.
While meeting with representatives of coastal states in Goa nearly a year back, India’s Ministry of Ports, Shipping and Waterways (MPSW) discussed establishing shipbuilding and ship-repair clusters in coastal states aimed at strengthening India’s shipbuilding supply chain. According to MPSW officials, all the coastal states showed keen interest in promoting maritime development, including shipbuilding, with Andhra Pradesh state pledging to allocate 20,000 acres of land for maritime development.
India’s Hindustan Shipyard Limited (HSL), with an estimated 18% share of the Indian market, builds a diverse range of vessels, including bulk carriers, tankers, and offshore supply vessels, while Larsen & Toubro (L&T) Shipbuilding focuses on high-tech defense vessels, offshore platforms, and warships.
Meanwhile, the Indian International Maritime Dispute Resolution Centre (IIMDRC), a specialized platform, will offer solutions to resolve maritime disputes efficiently; it will function as a branch of the India International Arbitration Centre (IIAC), and will be based in Mumbai.
In its Shipbuilding Global Market Report 2024, the U.K.-based Business Research Company estimated the global shipbuilding market size was around $ 220.52 billion in 2024, and would grow at 6.5% compound annual growth rate (CAGR), based on economic growth in emerging markets, an increase in seaborne trade, and supportive government policies. The Asia-Pacific region is expected to be the largest shipbuilding market. India’s shipbuilding industry, according to Finextra Research, will post “exponential growth” in the coming years.
India intensifies global partnerships to accelerate shipbuilding growth
The MPSW is working on a new shipbuilding scheme, which would incentivize Indian shipyards through various measures, according to MPSW Secretary T.K. Ramachandran, and elevate India’s position to become one of the world’s top ten shipbuilding nations by 2030.
During an official visit to Norway some months back to participate in the Nor-Shipping Conference, Indian Minister of Ports, Shipping and Waterways Sonowal held talks with Japan’s Minister of Infrastructure and Transport Terada Yoshimichi, aimed at deepening maritime ties between India and Japan. The two ministers reviewed the progress of a possible partnership deal between Indian and Japanese shipyards.
Sonowal expressed India’s interest in collaboration between Indian shipyards and Japanese shipbuilding companies such as Imabari Shipbuilding, JMUC, Kanagawa Dockyard, and Mitsubishi Heavy Industries.
“Japan’s expertise in shipbuilding and ship repair is well recognized, and I see great scope for collaboration in this area. We also invite Japan’s big three maritime companies, NYK Line, Mitsui O.S.K. Lines, and K Line, to explore joint ventures and investment opportunities in India’s growing maritime sector,” Sonowal said.
Imabari Shipbuilding is already exploring Greenfield investment possibilities in India’s Andhra Pradesh state. In February, Imabari’s President Yukito Higaki led a high-level delegation to meet Andhra Pradesh Chief Minister N. Chandrababu Naidu, where the two parties discussed potential investments in shipbuilding.
Andhra Pradesh has adopted a cluster-based approach, zoning off land in specific port areas for allocation to shipbuilding and ship-repairing companies. The land may be provided for a long-term lease (30-60 years) at a nominal rate.
In discussions with the Norwegian Shipowners’ Association (NSA), Sonowal called for shipowners to consider investing in India’s maritime sector. The minister recognized that Indian shipyards currently account for 11% of NSA’s order book. India has already made strong inroads into the Norwegian shipping community, for example, with the autonomous barges for ASKO Maritime, a division of a Norwegian grocery chain. In April, India’s Udupi Cochin Shipyard delivered the first dry bulk vessel, Wilson Eco 1, to the Norwegian Wilson Ship Management. The vessel is the first in a series of six 3,800 DWT cargo ships, which Wilson ordered at the yard in June 2023.
India has also courted South Korea’s shipbuilding industry, encouraging partnerships and development of yards in India. It has also courted shipping lines, including Maersk and MSC, with proposals for ship repair and shipbuilding at India’s yards.
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Source: ajot
