Three shipbuilding clusters to come up at ₹75,000 crore

Mint: The Centre is looking at an investment of ₹75,000 crore in three brand-new shipyards planned along its east and west coasts, as it targets making India a global hub for shipbuilding. The investment will be made over four to five years, with the yards capable of building and repairing ships.

“The government is seeking to set up three greenfield shipbuilding clusters and support the existing shipyards in carrying out brownfield expansion. Overall, the government is targeting about ₹25,000 crore investment per greenfield cluster, which may be subject to significant changes based on the final locations and the shipyard sizes,” the Union Ports Ministry said in response to a query.

Five states are in talks with local and foreign shipbuilders to select ideal locations to host the three facilities, the ministry said. One of the shipyards may also host a shipbreaking facility to supply material for shipbuilding.

“MoPSW (Ministry of Ports, Shipping and Waterways) is also finalizing schemes to support these clusters (greenfield). For the brownfield expansion of existing yards, there is a scheme under finalization to support the expansion efforts of all the yards,” the ministry said.

Greenfield manufacturing refers to facilities built from scratch, while brownfield refers to the expansion of existing facilities.

The planned total investment of ₹75,000 crore is expected to come from both the Centre and private companies.

Mint reported in July that Indian state-run firms were looking to tie up with global shipbuilders. Also, in September, Mint reported that India is looking to Japan and Korea for shipbuilding initiatives. Talks are ongoing with Japanese and Korean shipbuilders for investments in Indian clusters, while existing public sector shipbuilders are separately negotiating with Korean firms for joint ventures.

The shipyard push is part of the government’s ambition to build ships of all sizes locally and encourage Indian-built, Indian-owned, and Indian-flagged cargo ships. The country’s share in global shipbuilding currently remains below 1%. The government projects to raise the share of Indian-built ships in the Indian fleet from 5% at present to 7% by 2030 and 69% by 2047.

Earlier, Shipping Secretary T.K. Ramachandran told Mint that five locations—in Andhra Pradesh, Odisha, Tamil Nadu, Gujarat, and Maharashtra—were being considered for developing shipbuilding clusters. It is expected that the first three may come up in Tamil Nadu, Gujarat, and Odisha, where identification and notification of land for the projects have progressed swiftly.

Special Purpose Vehicles (SPVs) have also been formed in these states, and they have commissioned Techno-Economic Feasibility Reports (TEFRs) for the projects.

Some of the sites have completed initial viability assessments of the locations, and the same is planned for the remaining sites. The findings will be shared with shipbuilders, who will then be invited to invest in these clusters, the ministry said.

“A significant capital commitment under a public-private partnership model underpins the ambitious objective of becoming a leading shipbuilding power by 2047. While the challenge is massive, the opportunity is equally substantial,” said Anshuman Magazine, Chairman and Chief Executive Officer (CEO), India, South-East Asia, Middle East & Africa, at CBRE, a global consulting firm.