Indian ship building industry to reach Rs 9,200 crore by 2015

16 APR, 2012, VIRAJ DESAI, ET BUREAU
NEW DELHI: The Indian shipbuilding and ship repair industry is likely to reach Rs 9,200 crore from the current level of just over Rs 7,310 crore, according to a study done by the industry body ASSOCHAM.

The study 'Shipbuilding Industry in India: An overview', by The Associated Chambers of Commerce and Industry of India (ASSOCHAM), said that India accounts for just about one per cent of the global shipbuilding industry worth about Rs 7.3 lakh crore but is growing at a compounded annual growth rate (CAGR) of about 8 per cent.

Globally, this industry is growing at a CAGR of about 24 per cent and is likely to reach Rs 14 lakh crore by 2015 owing to rising global sea borne trade, according to the study.

"Lower costs of labour, availability of skilled workforce together with robust demand in the domestic market and a growing steel industry are certain factors that build up a strong case for shipbuilding sector in India," said Mr D.S. Rawat, secretary general of ASSOCHAM.

"For a well balanced and comprehensively developed domestic shipbuilding and ship repair industry, the government should provide fiscal incentives to develop strong research and development facilities, designing capabilities and set up an auxiliary base to encourage the growth of the sector," said Mr Rawat.

The overall cargo traffic at major ports in India is about 600 million tonnes and is likely to reach 1,230 million tonnes by 2015 and 3,000 million tones by 2020 growing at a compounded annual growth rate (CAGR) of about 20 per cent, said ASSOCHAM study.

"For this India needs to furbish up its ports and the whole shipping infrastructure to enhance the handling capacity and facilitate operation of larger shipments to increase its share in the global maritime business," said Mr Rawat.

"The government should rope in maritime states to identify and make land available, thereby seeking their contribution for setting up a new port or a shipyard in each of these states."

"This also denotes huge scope for private sector and foreign direct investment (FDI) in the shipping industry and the maritime states can develop a composite project on the public-private partnership model," he said.

China, South Korea and Japan are leading shipbuilding nations and cater to over 80 per cent of the global shipbuilding industry. China alone accounts for over 35 per cent of this global industry. India and Vietnam are upcoming centres for global shipbuilding.