Despite recessionary conditions, traffic handled at major ports in India grew on an average by 5.7 per cent in the year 2009-10, over the year 2008-09, states a research study by Export-Import Bank of India (Exim Bank). The study assesses that the shipbuilding industry in the country has the potential to grow at a rate of more than 30 per cent, and this rate of growth could be achieved through supportive measures by the Government, including incentives for shipyards.
The study views that approximately 95 per cent of the India’s trade by volume, and 70 per cent by value, is moved through maritime transport. India is among the top 20 leading countries having large number of merchant fleets in the world. The Gross Tonnage (GT) under the Indian flag was 10.1 million, as of 1.09.2010, with as much as 1029 ships in operation.
The study titled, ‘Indian Shipping Industry : A Catalyst for Growth’ was released in the presence of Shri Salmar Khursheed, Hon’ble Minister of Water Resources & Minority Affairs, Government of India; Shri Subodh Kant Sahai, Hon’ble Minister for Tourism, Government of India; and Shri Chhagan Bhujbal, Hon’ble Minister of Public Works and Tourism, Government of Maharashtra; at the inaugural function of the Global Economic Summit 2011, organised by MVIRDC World Trade Centre, Mumbai, and All India Association of Industries.
According to the study, even though India occupies a small percentage of the global shipbuilding market, the Indian shipbuilding industry is well positioned for further growth. According to the world order book position, during 2009, Indian shipyards had an order book of close to 260 ships constituting 1 per cent share in terms of Gross Tonnage (GT) and 2.8 per cent share in terms of number of bookings. India stood at the sixth position in the world ship-building order book.
The study by Exim Bank recommends that increasing investment in shipping industry, strengthening shipbuilding industry, developing adequate container freight stations, integration of shipping and logistics, creation of adequate warehousing facilities, creation of multimodal logistics parks and tapping LNG business are some of the measures for further development of this sector.
The study also points out that the players in the shipping and associated sectors have also a great role to play for the development of the industry, for it to carve a niche in the world shipping map. Indian shipping industry needs to team up with foreign consortium of fleet owners to tap the growing LNG transportation business. Indian ship builders must focus on benchmarking their own processes to international standards to improve the efficiency, delivery time, price and quality. Innovative financing measures such as German KG model may be adopted to encourage fund flow into this sector. It is therefore essential for India to put together all such strategies that would lead to optimal and effective contribution towards developing the shipping industry.
Speaking at the inaugural session of the Global Economic Summit, focusing on growth in SMEs, Mr. T C A Ranganathan, Chairman and Managing Director, Exim Bank, pointed out that enhancing competitiveness is the key for SME expansion and growth; and one of the imperatives to achieve growth is through innovation, technology absorption and R&D, so as to foster movement up the value chain into high growth sectors. Mr. Ranganathan stressed the need for higher expenditure on R&D, which generally correlates with increase in high-tech exports, such as those in aerospace, computers, pharmaceuticals, scientific instruments, and electrical machinery sectors.