Global Shipbuilding Industry- India in Global Market and Key Initiatives by Government

India‘s location with water bodies on three sides makes it a perfect destination for a robust shipbuilding industry. However, the industry is currently in a nascent stage in the country, with potential for exponential growth in the coming years. Shipbuilding is not the whole of the maritime industry which often people get confused about, rather it is a part of the maritime industry that deals in the construction, maintenance, and repair of ships/ vessels used for trade, defense, and transportation. Since it caters to different sectors, the ships or vessels range from small boats to even warships. This article will deep dive into this industry to see how it has been for all these years and where is it heading.

Shipbuilding Industry in India & It's contribution to Indian Economy

In 2024, the Indian shipbuilding industry is valued at $1.12 billion, which is a significant jump from the valuation of $90 million back in 2022. Since it is in its nascent stage, the industry currently accounts for less than a percent of the global shipbuilding market. Along the coastline of India, the states that have prominent shipbuilding industries include –

1. Maharashtra: Mumbai being in Maharashtra is currently one of the biggest shipbuilding hubs in the country with multiple shipyards operating there.

• Mazagon Dock Shipbuilders Limited is one of the two largest shipbuilding companies in India. It is a state-run shipbuilding company with its shipyard in Mumbai. 
• ABG Shipyard Limited, which is owned by ABG Group, is a public shipbuilding company operating in Mumbai. It has other subsidiaries, which are Western India Shipyard and Vipul Shipyard.
•  Bharati Defence And Infrastructure Limited also operates from Mumbai, is a public entity with a subsidiary Pinky Shipyard.
• Bombay Dockyard is a government-run shipyard in Mumbai.

2. Kochi: The next state, that contributes significantly to the Indian economy through the shipbuilding industry, is Kochi. The shipyards and companies it has includes –

• Cochin Shipyard Limited is another of the two biggest shipbuilders in the country. It is again a government-run enterprise with two significant subsidiaries, which are Hoogly Cochin Shipyard, and Udupi Cochin Shipyard.
• Bristol Boats, Praga Marine Private Limited, and Sea Blue Shipyard Limited are three private shipbuilding entities located in Kochi.

3. Goa: The next on the list is Goa which has both state and privately-owned shipbuilding enterprises that include–

• Goa Shipyard Limited is another major shipyard in the country run by the state government of Goa. 
• Dempo Shipbuilding & Engineering Pvt. Ltd. is a private shipbuilding company owned by Dempo Group and it has a subsidiary which is Modest Infrastructure Ltd.
• Other private players in this industry present in Goa include Mandovi Drydocks, Marine Operating Company Pvt. Ltd., and Timblo Drydocks Pvt. Ltd.

4. Vishakhapatnam:  This state is known for its harbors and ports and two of the major shipbuilding entities are present here.

• Hindustan Shipyard Limited, which is a state-run enterprise.
• The other one is the Naval Dockyard, which is also a government-run shipbuilding entity.

5. West Bengal: Kolkata in West Bengal has some of the biggest dockyards and shipbuilders in the country.

• Garden Reach Shipbuilders & Engineers is a state-owned entity and it has a subsidiary, which is Rajabagan Dockyard.
• Another state-owned shipbuilder from WB is the Shalimar Works (1980) Ltd., which is also in Kolkata.
• Barrackpore, WB has Titagarh Marine Limited, which is another major public sector player in this industry. It is owned by Titagarh Group.

6. Chennai: Then we have Chinnai where Kattupalli Shipyard is located which is a public sector enterprise run by L&T Shipbuilding. There is another private player in Chennai, which is Vadyar Boats.

7. Apart from these states, and shipyards, there is one private entity in Ratnagiri, which is Chowgule Shipyard Drydock.

8. Reliance Infrastructure has one public sector shipbuilding entity in Pipavav – Reliance Naval and Engineering Ltd.

9. San Marine in Kakinada – private entity

10. Samudra Shipyard Pvt. Ltd. in Alappuzha – private entity

11. SHOFT Shipyard – Bharuch

Company-wise contribution to the industry and economy

1. Mazagon Dock Shipbuilders Limited (MDL) has delivered more than 800 vessels since the company started operating. It is mostly known for building warships for the Navy and Coast Guard in India.

2. Cochin Shipyard Limited (CSL) is the largest shipbuilding company in the country, which mainly focuses on offshore vessels, aircraft carriers, and oil tanker construction. CSL has the biggest repair facility for ships in the country as well.

3. Hindustan Shipyard Limited (HSL) has an 18% market share in the shipbuilding industry and it reported a revenue of $420 million in 2022. The company constructs a variety of vessels that include tankers, bulk carriers, and supply vessels for offshore supply.

4. Larsen & Turbo (L&T) has a 15% market share and mainly builds defense vessels with highly advanced technology built for better facilities, communication, and other aspects. It also builds warships and offshore vessels. In 2022, it reported a revenue of around $350 million.

Shipbuilding Stocks in India

Where does India Rank Globally in the Shipbuilding Industry?

India currently ranks 20^th in the global shipbuilding industry with its 0.06% share in the global shipbuilding market. The global market is dominated by China, Japan, and South Korea, which collectively have 85% of the share in the market.

Government's Actions in the Shipbuilding Industry

The government of India has set a major goal for the shipbuilding industry in India with its Maritime India Vision (MIV 2030) and Amrit Kaal 2047 programs.

1. Under MIV, the government has set a target of taking India to the 10^th position in the global shipbuilding market by 2030 and by 2047, within the first 5 countries to dominate the shipbuilding industry.
2. MAKV is another major target by the government under which it is handling 1300 MMTPA of coastal cargo.
3. The government has also introduced the Scheme for Financial Assistance to Shipyards in India (SFAS) to enhance the industry and boost its capabilities, which can drive growth.
4. The Indian government is aligning its Net Zero vision with maritime vision, made major advances in bringing down emissions by vessels, and has the potential to lead sustainable and green shipbuilding.
5. The government vigorously working to push the shipbuilding industry forward and its 100-day agenda program to solve different issues in the industry has worked wonders.

Future of the Shipbuilding Industry

With the government’s support and investments coming in from different ways, now the massive targets set by the government for the industry look feasible. If you look at the overall maritime industry, it is one of the largest in the country, and thus, the shipbuilding industry holds a lot of potential if proper measures are taken. The Indian shipbuilding industry can witness exponential growth in the upcoming years, where the CAGR in the industry can touch 60% taking the current $1.12 billion valuation to over $8 billion by 2033. If the demand for the shipbuilding market in India picks up, by 2047, the opportunities can even grow to $237 billion.

Adani group on the other hand is coming up with a huge initiative for the shipbuilding industry, launched this year, 2024. The company announced its plan to invest close to ₹ 45000 crore to build shipbuilding facilities at Mundra Port, Gujrat. It is a part of a bigger plan, which is to build India as a global shipbuilding hub.

Conclusion

With the continuous effort by the government, foreign investments entering the shipbuilding industry, and domestic players pushing the bar higher with their investments and initiatives, the shipbuilding industry looks promising for the future. That said, the industry is still in its nascent stage, and thus, challenges are many along with the growing opportunities.