There are in all 32 shipyards, big and small, government and private, engaged in a wide range of products and services in the area of shipbuilding and ship repairs in India today. Their list includes Mazagon Dock (Mumbai), Garden Ship Builders & Engineers (Kolkata), Goa Shipyard (Goa), Cochin Shipyard (Kochi), Hindustan Shipyard, Vizag Hoogly Docks (Kolkata) while the private sector has three major yards — Bharati Shipyard (Maharashtra), ABG Shipyard (Gujarat) and Pipavav Shipyard (Gujarat). All of them are looking at avenues to expand their facilities with an estimated $1 bn investment outlook.

New investments are coming in from the Adani group, ABG Shipyard, Bharati Shipyard and government-owned Cochin Shipyard, with at least three of them promising larger yards comparable to the best in Asia. The Ahmedabad-based Adani group has finalised a ship repair and shipbuilding yard project at Mundra involving Rs 800 crore (approx US$ 177 mn).

Surat-based ABG Shipyard, India’s largest shipyard in the private sector, is in the process of setting up another brand new shipyard at Dahej. Spread out in four phases, over a period of seven years, with an investment of Rs 1,600 crore (approx US $ 355 mn), the new ship building facility at Dahej will propel it among the largest shipyards in Asia. It has an order book of Rs 1,300 crore (US$ 280 mn approx) involving some 25 ships.

Pipavav Shipyard situated on the Gulf of Cambay, built at a cost of Rs 800 crore (US$ 177 mn approx) , is also poised to put India on the global shipbuilding map. Bharati Shipyard, which has successfully tapped the stock market not long ago, is busy developing its facilities to make use of the increasing opportunities thrown open thanks to the upsurge in international shipping trade. Another new entrant to ship repair segment is Mumbai-based SKS Ship. The Company is afoot with plans to setting up ship repair facility with Danish collaboration.

The general healthy trend prevailing the industry seems to gel with the Shipping Ministry, which aims to make Indian shipbuilding globally competitive and emerge as a leading player by 2025. It has already rolled out a packet of measures including fiscal concessions and subsidies, which would make local ship building globally competitive. The government, on its own, is exploring the possibility of setting up two international shipyards. According to sources from the Union Shipping Ministry, Cochin Shipyard and Hindustan Shipyard were identified for this purpose. This is in addition to its measures for expanding and modernising existing public and private sector shipyards. It also encourages foreign direct investment for the sector. According to shipping minister, the government would invite private and foreign direct investment for these projects.

Our Say There are various factors acting in favour of the present thrust. Two important components are competitive labour costs, availability of skilled engineering and naval architectural talent. Industry experts state that the future of this industry in India is bright and that the government’s shipbuilding subsidy has made the local shipyards price competitive. Labour cost per worker in India is at present estimated at $1,192 per year, while it is $10,743 and $21,317 per day in Korea and Singapore (both leading shipbuilding nations) respectively. Though Indian labour is cheap, they however would have to become time competitive and offer much shorter delivery periods as well. Currently Indian yards find it difficult to keep delivery dates and time overruns are quite common. These are important aspects that need analysis and follow up. Time overruns neutralise the low wage structure and add large overheads to the cost of production. Another crucial factor is autonomy. Industry sources feel that most chief executives of shipyards lack the full liberty to operate the shipyard, build the ship on time and be accountable. If these factors are dealt with things are likely to change. With ship-building industry growing at the rate of about 30% per annum, if India catches its sails properly, it could gather more wind and sail ahead.