The domestic shipbuilding industry may be growing at eight per cent annually, but it accounts for just one per cent of the global shipbuilding market.

China, South Korea and Japan are leading shipbuilding nations, accounting for over 80 per cent of the global shipbuilding industry, which is estimated at Rs 7.3 lakh crore. China alone accounts for over 35 per cent of the global market.

In order to put Indian shipbuilding on a faster track, industry bodies suggest bracketing the industry as a strategic one, besides reviving the subsidy scheme for shipbuilders and cutting the slack on certain tax regulations could be taken up for starters.

Subsidy

The subsidy is provided to the extent of 30 per cent of contract price of orders, subject to certain conditions such as price discovery through competitive bidding

Domestic shipyards anticipated that their subsidy demands would be in the range of Rs 700 crore in 2011-12.

The domestic shipbuilding and ship repair industry together is likely to reach Rs 9,200 crore from the current level of just over Rs 7,310 crore in the next three years, estimates the apex industry body, Assocham. On the other hand, despite the current slowdown in the shipping markets, the global shipbuilding and ship repairing industry is seen as growing at a CAGR of about 24 per cent and is likely to reach Rs 14 lakh crore by 2015.

“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,” says the Assocham Secretary-General, Mr D.S. Rawat.

price Difference

Spiralling input costs, together with miscellaneous duties and taxes, puts a significant price differential of about 50 per cent in building a ship in India, compared to other countries, Assocham points out.

amitmitra@thehindu.co.in

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