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India Maritime Industry
Context:
- The Ship Building Financial Assistance Policy (set to lapse in 2026) is expected to be replaced with a new 10-year scheme offering expanded incentives.
- This move aligns with India’s goal of developing its blue economy—the sustainable use of ocean resources—and positioning the country as a global ship manufacturing hub.
More in News:
- Under the Ship Building Financial Assistance Policy (SBFAP), financial assistance for Indian shipyards has decreased from 20% in 2016 to 11%.
- A proposal is being considered to increase support, especially for green vessels.
- A ₹5,000 crore viability gap funding scheme is in the works to incentivize the construction of inland vessels, with plans to extend this support to manufacturers of sea-bound vessels, including cruise ships.
India’s Maritime Sector
Shipping
- Global Market Share Goal: India aims to achieve 5% of the global shipbuilding market, currently holding less than 1% of global tonnage.
- According to Maritime India Vision 2030 policy: India Is Top 5 in trained manpower, 2nd in ship recycling globally and 21st in ship building with rapid capability expansion.
- Strategic Importance: Promoting domestic shipbuilding will support Indian ship owners and position India as an alternative to Vietnam, Korea, Japan, and China.
Port
- According to Maritime India Vision 2030:Two Indian Ports, JNPT and Mundra have the distinction of featuring in the list of top 40 global container ports.
- Over 54% of India’s total cargo is handled at the 12 Major Ports, which have seen a capacity increase of over 65% in the last five years.
Inland Waterways
- India has increased the modal share of cargo from 0.5% to 2% and has witnessed 19% year-on-year growth in cargo volumes over the last 5 years.
- Inland Waterways in India: Extensive network of rivers, canals, backwaters, and creeks. Underutilised for freight transport compared to road and rail, despite being cost-effective and eco-friendly.
- National Waterways Act, 2016: Declared 111 inland waterways as National Waterways across 24 states, covering 20,275 km to promote shipping and navigation.
Challenges Faced by India’s Maritime Sector:
- Infrastructure Constraints
- Limited capacity due to inadequate warehousing and handling equipment.
- Poor hinterland road and rail connectivity.
- Imbalance between onshore and sea-based infrastructure.
- Shallow draft levels at ports require frequent dredging.
- Operational Inefficiencies
- Outdated technology and IT systems.
- Slow customs clearance and non-standardised procedures.
- Bureaucratic red tape and excessive paperwork.
- Human Resource Challenges
- Shortage of skilled workers.
- Port-specific issues (e.g., siltation, semi-mechanisation, congestion).
- Management and Development Issues
- Dual governance (central and state governments) complicates decision-making.
- Restrictions on Foreign Direct Investment and land acquisition delays.
- Unhealthy inter-port competition.
- Additional Concerns
- High port charges compared to global standards.
- Lower efficiency at government-owned ports compared to private ones.
Government Initiatives
- Sagarmala Programme (2015):Focus on port modernization, connectivity, industrialisation, coastal community development, and inland water transport.
- Maritime India Vision 2030:Launched in 2021 with over 150 initiatives and planned investments of ₹3-3.5 lakh crore.
- Maritime Amrit Kaal Vision 2047:Outlines 300+ initiatives for growth and development in coastal regions.
- Major Ports Authority Act 2021:Modernises governance of 12 major ports and enhances port autonomy.
- Draft Indian Ports Bill 2022:Proposes greater autonomy for port authorities and creation of State Maritime Boards for non-major ports.
- Comprehensive Port Connectivity Plan (2022): Identified 107 projects to enhance connectivity between ports and other transport modes.
- Capacity Expansion and Investment
- Plans to quadruple port capacity by 2047.
- 100% FDI allowed in port infrastructure development.
- New Model Concession Agreement (2021): Framework for Public-Private Partnership (PPP) projects in major ports.
- Financial Assistance: Amended SBFAP guidelines provide:
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- 30% financial assistance for vessels using green fuels.
- 20% assistance for vessels with electric or hybrid propulsion systems.
- Wind farm installation vessels and advanced dredgers should be included for greater assistance.
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- Maritime Development Fund: Proposed to address financing challenges and provide long-term, cost-efficient capital for sector growth.
- The PM Gati Shakti National Master Plan (NMP) focuses on integrated planning to improve multimodal connectivity and logistics efficiency, addressing infrastructure gaps.
- It aims to enhance connectivity to various economic zones, including the ports and shipping sector. So far, 101 projects worth ₹60,872 crore have been identified under the initiative, with 13 projects worth ₹4,423 crore already completed
Maritime Domain Awareness:
- Maritime Domain Awareness (MDA) is the comprehensive understanding of all activities, events, and actions in maritime regions that impact security, safety, economy, or the environment.
- It involves monitoring maritime areas to detect, identify, and respond to threats like piracy, illegal fishing, smuggling, trafficking, and other security risks.
Steps Taken by India to Enhance Maritime Domain Awareness:
- India has set up the Information Fusion Centre – Indian Ocean Region (IFC-IOR) to collect, analyse, and share maritime security information with partner nations and maritime agencies.
- India established the Information Management and Analysis Centre (IMAC) in 2014, serving as the nodal centre of the National Command, Control, and Intelligence (NC3I) Network.
- India is establishing a National Maritime Domain Awareness Center (NMDAC) to counter emerging threats in the Indian Ocean Region (IOR).
- The Quad leaders launched the Indo-Pacific Partnership for Maritime Domain Awareness (IPMDA) in Tokyo to boost maritime security by providing Indo-Pacific nations with advanced technologies and training for real-time maritime awareness.
- IMEC, launched during India’s G20 presidency, aims to connect India, the Middle East, and Europe through the UAE, Saudi Arabia, Jordan, Israel, and the EU.
- It will strengthen India’s maritime security and, strategically, reduce our dependence on the few routes that could currently pose risks to our maritime security
