Shipbuilding for Atma-Nirbhar Bharat

Shipbuilding for Atma-Nirbhar Bharat

News: According to the Economic Survey 2023, shipbuilding has one of the highest employment multipliers and is capable of generating mass employment in remote, coastal and rural areas.

Significance:
 Shipbuilding industry is a strategically important industry due to its role in energy security, national defence and the development of the heavy engineering industry.
 Among manufacturing activities, shipbuilding has one of the highest employment multipliers of 6.48 and is capable of generating mass employment in remote, coastal and rural areas. For instance, the recently commissioned aircraft carrier INS Vikrant alone engaged approximately 500 MSMEs, 12,000 employees from ancillary industries, and 2,000 shipyard employees.
 A study undertaken by the Navy for the construction of seven P17A ships reveals that around three-fourths of the total project cost of warships is invested back into the Indian economy.
 This investment is ploughed back into the economy through indigenous sourcing of raw materials, development of equipment and systems installed onboard ships and other manpower services.
 An indigenous shipping and shipbuilding industry can also reduce freight bills and forex outgo, thus reducing the current account deficit.
 It has links to other ancillary industries including steel, engineering equipment, port infrastructure, trade and shipping services.

Challenges
 A snapshot of India’s private shipbuilding sector shows that apart from mismanagement, most ship-builders are debt-ridden or function at break-even levels with hardly any of them generating profits.
 It has failed to ensure a level playing field since most government orders are given to public sector shipyards by nomination. To cap it all, the absence of a complex of shipbuilding ancillary industries has imposed a further barrier on private shipyards.

Way forward:
 It is time to acknowledge shipbuilding as a “strategic industry,” with a vital role to play in the nation’s security as well as industrialization and job creation, and to accord it the status of a full-fledged department or ministry.
 Concurrently, a strategy and road-map for shipbuilding need to be drawn up, independent of the Sagarmala Project, which has remained focused on ports.