India’s Incredible Journey Towards Maritime Prominence

9/6/2010

Nation in fleet expansion mode as seaborne
trade will reach all time peak this year

With the world’s 10th highest GDP in absolute terms and a purchasing power parity (PPP) ranking third globally, India’s booming international maritime trade is the sixth largest, yet only eight per cent of it is transported on board Indian-owned vessels according to Vijay Kumar, Secretary of the Shipyards Association of India and managing director of the country’s biggest new building, repair and conversion player.

“Demand for sea transportation capacity to and from India is massive and is projected to continue to increase significantly driven by an annual growth rate of 8.5 per cent meaning that our external trade will grow at 14 per cent adding more pressure for capacity expansion to facilitate the transport of goods and commodities to and from the Sub Continent,” said Kumar this week in Athens where he led the first ever Indian pavilion to be staged at a Posidonia event, the world’s most prestigious maritime forum.

“India’s commercial fleet today stands at eight million GRT and the government has earmarked significant investments of US$ 5 billion in the ship building sector to help develop additional capacity, but the downturn has postponed many of these projects,” he said.

India has off late taken giant strides towards establishing itself as the world’s seventh biggest ship builder with nearly two per cent of the global new building output, having grown by a staggering 1,623 per cent in the five years since it held a negligible 0.1 per cent market share.

“This growth has been supported mainly by European owners who comprise 70 per cent of our order books of sophisticated offshore, drilling rigs and Suez max projects. Once we develop our infrastructure India will enter the fray of VLCC and will help us increase our footprint by competing in more tenders,” said Kumar.

India’s ship building industry current value is put at US$ 15 billion equally split between commercial and naval vessels. The sector employs 100,000 workers across 26 modernly equipped yards, seven of which are government owned. Bombay, Gujarat, Calcutta and Kochi are the main hubs where the bulk of the output is manufactured.

The Indian government is providing significant incentives to international investors to attract major ship builders from Korea and Japan to invest in new yards in the country. The strategy includes incentives to other equipment manufacturers such as Rolls Royce, Daihatsu, Wartsila who have opened facilities in India during the last 12 months. MAN of Germany was the latest to set up shop in the country’s Western area of Auranagabad.

“Our indigenous equipment makers are already very strong and provide nearly 90 per cent of our state-of-the-art naval new buildings which include the world’s largest frigate and even an aircraft carrier which is currently under construction,” said Kumar.

According to Kumar, India’s only price-based competitor is China. “India is a minimum five to seven per cent on average more cost effective than China, but depending on the project, we can be as high as 15 per cent more competitive compared to the Chinese,” he said.

“We are extremely impressed with Posidonia and we are thankful to our government who insisted that we must participate in this event. The event attracts the crème de la crème of the shipping industry’s A-List and we have already established contact with a wide range of potential clients, suppliers and investors who can partner with the maritime community of India and benefit from our ambitious plans,” said Kumar.

Posidonia 2010 is sponsored by the Ministry of Economy, Competitiveness and Shipping, the Municipality of Piraeus, the Hellenic Chamber of Shipping, the Union of Greek Shipowners, the Greek Shipping Co-operation Committee, the Hellenic Shortsea Shipowners Association, the Association of Greek Passenger Shipping Companies and the Union of Marine Enterprises.

Source: Posidonia Events