Maritime Sector in India

Why in the News? 

PM launches initiatives worth ₹2.2 lakh crore for shipping and shipbuilding sectors at Maritime Leaders’ Conclave.

UPSC Relevance 

GS3, Infrastructure: Energy, Ports, Roads, Airports, Railways etc. 

PYQ

2024

What is the need for expanding the regional air connectivity in India? In this context, discuss the government’s UDAN Scheme and its achievements.

Opportunities for India in the Maritime Sector

• Port Achievements:
  • Doubled Port Capability: The capability of major ports has doubled, and cargo movement in inland areas has increased by 700%
  • The Vizhinjam deep water transit hub has become operational.
  • JNPT (Jawaharlal Nehru Port Trust) has doubled its handling capability, making it India’s biggest container port.
  • Kandla port and JNPT have shown great capabilities.
• Global Maritime Hub: The India Maritime Week has grown from a maiden event in 2016 to a global summit with 85 participating countries, signaling world confidence in India’s maritime capabilities. Indian ports are now considered among the best in the developing world. The Memoranda of Understanding (MoUs) signed at the event show global confidence in India.
• Improved Logistics Performance: India is ranked 38th in the World Bank’s 2023 Logistics Performance Index (LPI), an improvement from its previous 44th position.
  • India ranked 22nd for International Shipments, and its number of seafarers has increased, placing it among the top three globally in terms of seafarer numbers. 
  • The average turnaround time for ships at Indian ports has significantly improved, falling to less than one day, or approximately 48 hours, from an average of over 4 days in previous years.
• Global Shipping Hub: India is a crucial hub for trade, shipbuilding, and ship recycling, with growing technological and digital capacity in the sector.
  • Growing Shipbuilding Capacity: As the global market reaches capacity, India’s rapidly growing position as a builder of the global fleet creates opportunities for new orders and partnerships. For example, 10% of ships ordered by members of the Norwegian Shipowners’ Association are built in India.
  • Trusted Shipbuilding Partner: Indian yards, such as Cochin Shipyard, have secured major orders, including 14 vessel orders from Norway’s Wilson ASA, demonstrating trust and quality.
• Sustainable Practices: India is an excellent partner in the development of environmentally sound and safe ship recycling.
• Forward-Looking Strategy: India’s Maritime India Vision 2030 and Amrit Kaal 2047 provide a clear, forward-looking strategy for the sector.
• A Need for Stability: The world is experiencing “rough seas” and “global tensions,” which are causing trade headwinds. Amid these tensions, the world is looking for a “steady lighthouse,” a role India is positioned to play “very strongly.” 

Challenges Ahead

• Infrastructure and Connectivity Gaps
  • Port Modernization: While port capacity has increased, some ports still lack modern facilities and technology needed for world-class efficiency
  • Hinterland Connectivity: There are persistent connectivity deficits between ports and the hinterland, especially concerning road and rail bottlenecks. This is a major factor in India’s high logistics costs.
  • Multimodal Integration: Weak integration between different modes of transport (road, rail, water) and storage networks creates inefficiencies and “hidden costs” in the supply chain.
• Shipping Capacity and Self-Reliance
  • Low Indian Flagged Tonnage: A major challenge is that a large percentage of India’s trade cargo (around 80%) is still carried on foreign-flagged or foreign-owned vessels. This results in significant foreign exchange spending (estimated at $70-75 billion annually)
  • Need for Shipbuilding Capital: Developing a robust, self-reliant shipbuilding and ship-owning industry requires a massive influx of capital, an issue being addressed through new financial models and funds like the Maritime Development Fund (MDF)
  • Piracy and Security: Incidents of pirate attacks in the Arabian Sea and Indian Ocean pose a serious threat to the safety of Indian seafarers and ships, as well as sea-borne trade.
• Sustainability
  • Decarbonization Investment: Meeting global maritime targets for decarbonization (such as cutting emissions by 30% by 2030) requires massive investment in green technology, alternative fuel infrastructure (like hydrogen and ammonia), and port-side power
  • Social and Environmental Balance: Ensuring that port-led development is equitable and inclusive, and that it aligns with environmental protection and social goals, especially concerning coastal communities and Indigenous Peoples, remains a delicate balancing act.
    • For Example, Activists have raised concerns over tribal rights in the Great Nicobar Project.
  • Achieving Net-Zero: A major international challenge is the need for member states to unite and ensure the International Maritime Organization’s Net-Zero Framework becomes a reality.
  • Marine Pollution and Sustainable Management: The ongoing focus remains on sustainable ocean management and mitigation of marine pollution.
• Workforce
  • Inclusion in Maritime Professions: Globally, women are a minority in maritime professions, and increasing gender equality and inclusion is a goal for both countries.
  • Skilled Workforce: There is an ongoing need for a larger and more trained professional workforce in the maritime sector to manage modern, complex, and technology-driven operations

How the Norway-India Partnership Can Help?

• Boost from TEPA: The entry into force of the India-EFTA Trade and Economic Partnership Agreement (TEPA) provides a major boost to the partnership.
• Ocean Dialogue and Task Force: The India-Norway Task Force on Blue Economy focuses on sustainable ocean management, mitigating marine pollution, and green shipping.
• Shared Expertise in Green Shipping: Norway brings its comprehensive maritime cluster and experience in reducing domestic emissions by 50% by 2030 (compared to 2005 levels), exploring fuels like ammonia and hydrogen, and using autonomous and fully electric vessels (e.g., Yara Birkeland).
• Joint Working Group Discussions: The 10th Joint Working Group Maritime discussed green shipping, maritime training and security, and ship recycling.
• Maritime Training and Seafarer Opportunities: Through TEPA, both countries have agreed to facilitate on-board training opportunities for their respective seafarers.
• Gender Equality: Norway is a committed partner in advancing women’s participation, supporting initiatives like the Maritime SheEO Conference since 2019, and sharing best practices to make the industry more inclusive.

Government’s Initiatives

The Prime Minister announced and detailed major government reforms and investment plans:

• Massive Investment: PM Modi launched initiatives worth ₹2.2 lakh crore for the shipping and shipbuilding sectors at the Maritime Conclave.
  • This includes the acquisition of 437 vessels.
• One Nation, One Port Process: This initiative aims to standardize procedures and reduce documentation requirements across all ports, enhancing the Ease of Doing Business (EODB).
• Shipbuilding Priority: Shipbuilding is a top priority, with the government planning to offer new alternatives for finance and easy credit.

Read more on Shipbuilding Industry

• Legal and Regulatory Reforms:
  • Modern and futuristic laws have been implemented, and old laws have been scrapped.These laws strengthen sustainability, enhance digitization in ports, improve port safety, and boost ease of business.

• Partnerships and Incentives:
  • Encouraging Public-Private Partnerships (PPP), which are increasing.
  • Giving incentives to States to attract investment.
• New Mega Ports: Projects include the construction of the Vadhavan Port in Maharashtra (estimated cost ₹76,000 crore and the operationalization of the Vizhinjam Port (India’s first deep-water international trans-shipment hub)
• Green Port Development: Launching India’s first megawatt-scale indigenous green hydrogen facility at Kandla Port
• Inland Waterways: Cargo movement on inland waterways has increased by over 700% with the number of operational waterways rising from three to32, supported by projects like the Jal Marg Vikas Project