1. Shipbuilding is known as the mother of heavy engineering industries.
2. Shipbuilding enhances national security, supports strategic independence and improves the resilience of trade and energy supply chains.

Current Status of Shipbuilding in India

1. India’s shipbuilding industry accounts for less than 1% of the global shipping market.
   • China has the largest shipbuilding capacity in the world. South Korea is the second-largest shipbuilding nation. Japan ranks third in global shipbuilding capacity.
2. Foreign ships carry 92% of India’s total trade.
3. India pays $75 billion annually to foreign shipping companies for this trade.
4. Cochin Shipyard Limited has the highest shipbuilding and ship-repair capacity in India.

Challenges Faced by India’s Shipbuilding Sector

1. The sector faces high capital costs. High capital costs arise due to expensive financing options.
2. Expensive financing makes large investments risky.
3. High risk limits the ability of shipyards to scale operations.
4. The sector suffers from import dependence.
   • Import dependence refers to reliance on foreign sources for materials and components.
5. India lacks indigenous availability of many advanced shipbuilding materials and critical ship components.
6. Indian shipyards have lower productivity compared to global leaders.
   • Productivity is lower when compared specifically with China.
7. Outdated technology contributes to lower productivity.
8. Longer shipbuilding timelines reduce operational efficiency. Supply chain limitations further reduce productivity.

Strategic Importance of Strengthening Shipbuilding

1. Strengthening India’s shipbuilding sector is vital for long-term growth.
2. A strong shipbuilding sector supports India’s transformation into a global maritime hub.
3. The target year for this transformation is 2047.
4. A maritime hub refers to a global center for shipping, shipbuilding, and logistics.

Key Initiatives to Promote Shipbuilding in India

1. The government provides financial assistance to the shipbuilding sector.
2. The Shipbuilding Financial Assistance Scheme supports domestic shipyards.
3. The Maritime Development Fund provides long-term financing for maritime projects.
4. The government provides public procurement preference to Indian shipyards.
5. As per the Make in India Order, 2017, ships costing up to ₹200 crore must be procured from Indian shipyards.
6. Ships have been granted infrastructure status.
   • Infrastructure status allows access to favourable financing terms.
7. The Haritha Nauka Guidelines promote environmentally sustainable shipbuilding.
8. The Green Tug Transition Programme (GTTP) supports green tugs and domestic manufacturing.
   • Green shipbuilding focuses on reducing emissions and environmental impact.
9. The Shipbuilding Development Scheme (SbDS) has been launched to boost the sector.
   • SbDS promotes the creation of greenfield shipbuilding clusters.
     • Greenfield clusters refer to newly developed industrial zones.
   • SbDS supports expansion of existing shipyards.
   • SbDS provides risk coverage to reduce investment uncertainty.
10. The Maritime Amritkal Vision 2047 outlines a long-term roadmap for the shipping sector.
11. The vision aims to modernize shipping and shipbuilding in India by 2047.