Shipbuilding can contribute immensely to the vision of making India a $5 trillion economy by 2024 says Indian Navy chief Admiral Karambir Singh.
Speaking at the ‘International Seminar on Nation Building through Shipbuilding’, organised by industry body FICCI, the naval chief said that “As India’s shipbuilding industry matures, there is immense potential to forge strategic partnerships and convert India into a hub for defence shipbuilding exports and repairs to friendly foreign countries.”
There is enough headroom in the mercantile marine sector for India to attain the critical mass and become a hub for defence shipbuilding. However, to enable the strategic outcomes, there is a need for the nation to achieve a certain critical mass in indigenous ship production and repair capability, he said.
On the Navy’s shipbuilding initiatives and its linkage to nation-building, Singh said that the navy was fully invested in encouraging the indigenous shipbuilding ecosystem for 50 years before Make in India became a national mission.
According to him, “more than 60% of the naval budget is dedicated to capital expenditure and nearly 70% of this capital budget has been spent on indigenous sourcing amounting to nearly Rs 66,000 crore in the last five years.”
Since the launch of Make in India in 2014, 80% of the AoNs (Acceptance of Necessity) on cost, basis has been awarded to Indian vendors. Of the total 51 ships and submarines on order at various shipyards as on date, 49 are being constructed indigenously.
“Nearly, 90% of ship repair by value is undertaken by Indian vendors and mostly MSMEs, implying that in addition to the capital budget a high proportion of navy’s revenue budget is also being ploughed back into the economy,” the chief said.
He highlighted how each shipbuilding project creates logistics, spares and project support ecosystems, comprising OEMs, ancillary industry, and MSMEs, to support each platform. Kolkata based Garden Reach Shipbuilders & Engineers (GRSE), for instance, has nearly 2100 firms registered to support ongoing naval shipbuilding projects.
“Studies show that labour employed for a given sum of industrial turnover is one of the highest in the shipbuilding industry. Besides, the multiplier effect of one worker employed in a shipyard is about 6.4 in ancillary industries,” he said.
In his address, former naval chief Admiral Sunil Lanba, Chairman, National Maritime Foundation (NMF) said, “We need a comprehensive policy and support which will address all three segments – construction, repair and breaking.”