Date : 30/12/2023

Relevance: GS Paper 3- Economy - Value Chain

Keywords: Yangtze River, Three Gorges project, International Maritime Organization, Jal Marg Vikas Project-II (Arth Ganga)

Context-

India's maritime history, once vibrant and ahead of China, has witnessed a stationary course in the shipping value chain. This stagnation is in stark contrast to China's meteoric rise, especially evident in the bustling activity along the Yangtze River.

India vs. China: A Historical Perspective

Until the late 1980s, India held an advantageous position over China in the global merchant shipping arena. India had a tradition of modern ship-owning, exemplified by a former Indian Navy officer commissioning and owning giant oil tankers, the largest ever built. India's association with the International Maritime Organization further underscored its maritime prowess.

The Yangtze River: China's Lifeline and Modern Marvels

The Yangtze River, steeped in tradition and culture, has evolved into modern China's economic lifeline. The Three Gorges project has enhanced its significance. As one navigates the Yangtze, a spectacle unfolds with massive merchant ships transporting raw materials from across the globe or carrying finished products worldwide. Unlike other major canals, the Yangtze witnessed multiple convoys steaming in parallel, showcasing the seamanship, planning, and piloting skills involved.

India's Growth in Seafaring Population and Ship Management

India's early foray into private ship ownership and the growth of the seafaring population laid a foundation for its maritime endeavors. English-speaking Indian seafarers became prevalent globally, replacing qualified Eastern Europeans. The focus on expanding the seafarer population continued, with maritime training decentralizing and opening to private players during the United Progressive Alliance (UPA) government. Today, institutions across India produce seafarers of various grades and competencies. Indian seafarers, known for their value engineering, have ventured into ship management, contributing significantly to the industry. Sanjay Prashar estimates that Indian seafarers and their management companies bring in an estimated $6 billion in foreign exchange annually.

India's Stagnation in Ship Owning, Chartering, Financing, and Building

While India excels in supplying labor to the maritime industry, it lags in ship owning, chartering, financing, and building. State-owned facilities, like the Shipping Corporation of India, face challenges, that impact Indian shipyards' order books. Private shipowners catering to India's trade growth typically opt for second-hand ships due to cost considerations and alignment with short-term market forecasts.

China, on the other hand, stands as a stark contrast. Fueled by a dedicated government plan, China became the world's largest shipbuilder by 2020, constructing half of all global ships. Chinese shipowners primarily built their ships at state-owned government yards, ensuring a significant share in shipbuilding.

Government Initiatives and Missed Opportunities

The UPA government's Maritime Agenda 2020 aimed to increase India's share of global shipbuilding to 5%, but by 2020, India's share had dropped to practically zero. The Maritime India Vision 2030 outlines key themes but lacks a specific plan for shipbuilding and ownership. Despite a long coastline and a strategic geographic location, shipbuilding remains neglected, limiting India's presence in the global maritime industry and international trade.

Strategic Significance of Shipbuilding

Shipbuilding and ownership holds strategic importance for India, considering its long coastline and pivotal position in global shipping. A robust shipbuilding sector not only enhances India's standing in the maritime industry but also strengthens its international trade presence. The correlation between industrial might, military strength, and shipbuilding is evident, as exemplified by Nagasaki's shipyard thriving despite atomic bombings.

The Path Forward

Reviving ship owning, chartering, financing, and building is crucial for placing India at the center of the global maritime industry. The Maritime India Vision 2030 should incorporate specific measures to boost shipbuilding, aligning with the strategic goals of economic growth, military strength, and international trade prominence.

Through the implementation of Jal Marg Vikas Project-II (Arth Ganga), which is grounded in the sustainable development model, there will be a substantial boost to economic activities, particularly in maritime transportation along National Waterways No. 1 (River Ganga).

The government should also focus on defining initiatives, fostering innovation, creating a time-bound action plan, setting benchmarks, addressing capability building and human resources, and exploring ideas to convert "Waste to Wealth." This envisioned approach is expected to significantly contribute to enhancing brownfield capacity, establishing world-class Mega Ports, creating a trans-shipment hub in Southern India, modernizing infrastructure, and addressing concerns related to the marine ecosystem and maritime security.

Conclusion

In conclusion, India's static position in the shipping value chain, juxtaposed with China's dynamic progress, underscores the urgency for strategic interventions. Recognizing the pivotal role of shipbuilding and ownership, the Maritime India Vision 2030 must prioritize concrete measures to revitalize this sector.
The envisioned initiatives, such as the Maritime Development Fund and Eastern Waterways Connectivity Transport Grid project, provide a foundation for progress, but a more comprehensive and proactive approach is imperative. By aligning economic growth, military strength, and international trade prominence, India can navigate its maritime challenges and secure a vibrant future in the global shipping landscape.
The revitalization of shipbuilding and ownership is not merely an economic imperative but a strategic necessity. As India navigates its maritime challenges, a comprehensive and forward-looking approach is paramount to secure a dynamic and competitive future in the global shipping value chain.

Source- The Hindu