With the country’s new steel capacities and huge demand from international shipping companies for new ships already giving reason to cheer, a substantial 30% subsidy by the Centre on all shipbuilding contracts has turned out to be a further booster for Indian shipyards and will help in reviving the industry.

Shipbuilding is now an attractive business, say industry experts, and at least $1bn in investments is lined up in half-a-dozen shipyards, both existing and brand new, in the country. The government is said to be aiming to make the shipbuilding industry globally competitive and emerge as a leading player by 2025.

The government, which provided a back-ended 30% subsidy to all public sector shipyards on every new contract, has promised to extend the same to all shipyards, including those operated by the private sector. New investments are coming in from the Adani Group, ABG Shipyard, Bharati Shipyard and the government-owned Cochin Shipyard, with at least three of them promising larger yards comparable to the best in Asia.

The Ahmedabad-based, Adani Group owned shipyard, which will build vessels of diverse ranges — tanker, bulker, container ships — and sizes up to 100,000 dead-weight tonnage (DWT), has finalised a ship repair and shipbuilding yard project at Mundra involving Rs 800 crore ($ 186 mn). The ABG Shipyard is constructing a Rs 1,600-crore shipyard off Surat. Bharati Shipyard (BSL) has bagged contracts for supply of 4 multi-purpose container vessels from Sea Cargo Skips AS and Nor Lines AS, both from Norway, for $57.5mn.

The government is exploring the possibility of setting up 2 international shipyards and announced that Cochin Shipyard and Hindustan Shipyard were identified for this purpose.

Our Say The two primary reasons for the renewed interest in the domestic ship-building industry are the ever-increasing ship-building prices abroad and cheap labour costs in the country. Global ship-owners are trying to build new ships, anticipating another freight boom in coming years. Shipping assets have become precious with all existing yard capacities running full with orders till ’07-08. The world’s largest shipyards are currently in Asia, especially in Korea, Japan and China. With most players looking at leveraging the subsidies given by the government for shipbuilding, there is excellent scope for shipbuilding in India.