Need support for domestic shipbuilding
An Exim Bank study says the global shipbuilding industry witnessed a continued contraction during the period 2008 to 2012, with global shipbuilding order book position declining from 368 million GT in 2008 to touch a low of 160 million GT in 2012.
The development of a successful shipbuilding sector has been pivotal to the rapid and robust economic development in most countries in the world with long coastal boundaries.
Shipbuilding industry has the potential to significantly contribute to national Gross Domestic Product (GDP). The sector has an immense direct and indirect positive impact on most other manufacturing and ancillary industries, besides its huge dependence on infrastructure and services sectors in an economy.
According to Exim Bank study, the global shipbuilding industry witnessed a continued contraction during the period 2008 to 2012, with global shipbuilding order book position declining from 368 million Gross Tonnage (GT) in 2008 to touch a low of 160 million GT in 2012. The industry in major shipbuilding nations such as China, South Korea, Japan, Philippines, Brazil, Vietnam and India witnessed this contraction.
However, reflecting the recent pickup in global trade witnessed in 2013, the global shipbuilding industry has also witnessed a rebound to touch 182.9 million GT in 2013. All the major shipbuilding nations, except India, have also registered turnaround in the industry. The Big3, viz. China, South Korea, Japan, dominate the global shipbuilding industry, together accounting for as much as 87 per cent of the global industry in 2013.
Other countries, such as Philippines, Brazil and Vietnam, in recent years, have also emerged as important shipbuilding nations, reflecting the strong institutional and policy support by respective governments.
The study highlights that India ranks amongst the major global exporters of ships and boats. Reflecting India’s potential, India’s exports of ships and boats have witnessed a steady and sharp rise during the period 2002 to 2011, sig- nificantly increasing from a marginal US$ 56 million to US$ 7 billion during the period. Reflecting its global export capability, India ranked as the 4th largest global exporter of ships and boats, accounting for 3.7% of global exports during 2011. However, with the slump in global demand India’s exports of ships and boats too moderated to US$ 4.1 billion in 2012, and further to US$ 3.6 billion in 2013, with India’s ranking also slipping to the 5th position in 2012, and further to the 7th position in 2013.
Towards this end, countries such as Brazil, Philippines and Vietnam, among others, have put in place strong policy framework that have contributed significantly to these countries’ emergence as vibrant and growing shipbuilding nations. Learning from such country experiences could prove to be beneficial in development and expansion of India’s own shipbuilding industry.