India’s Stationary Course in the Shipping Value Chain

Why in News?

• India has had historical advantage in ship-owning and modern shipbuilding but there has been a shift in the narrative post-1980s, with China outpacing India in maritime development.
• Therefore, it is important to explore the maritime trajectories of China and India, with a focus on the Yangtze River's role in China's maritime prowess and India's challenges and opportunities in the shipping industry.

The Significance of Yangtze River in China’s Maritime Success Story

• Yangtze: China’s Heartbeat
  • The Yangtze River has been China’s heartbeat through its long history.
  • Tradition, legend, myth, culture, as well as commerce and industry are integral to the Yangtze tradition.
• Modern China’s Lifeline
  • In present-day China, the Yangtze River serves as a vital lifeline, seamlessly blending modernity with its ancient essence.
  • The Three Gorges project has further enhanced its importance, as one approaches the Yangtze from the sea, it is easy to hear the melodic tunes of Chinese opera or, more contemporarily, the sounds associated with Kung Fu Panda.
  • At the same time, it is impossible to ignore the presence of large merchant ships, often moving in groups of two or three, navigating in and out of the river.
• Unique Characteristics of Yangtze Compared to Global Counterparts
  • The modern engineering and shipping marvels of Suez or even the Panama Canal see a convoy of ships, one behind the other.
  • The Yangtze often sees multiple convoys steaming in parallel and, in between, smaller barges criss-cross the river, much like the autorickshaws on Indian roads.
  • It is an incredible sight, a story of expert seamanship, logistical planning, and piloting skills.
  • The ships are either bringing in raw materials from across the world including from far away Chinese-owned mines from Peru and Africa or leaving with finished products to all over the world.
  • Some vessels are new, built in shipyards that stand cheek by jowl at every bend in the river. Many are repaired in those same yards and dry docks.
• China Surpassing India by a Considerable Margin
  • The Yangtze River serves as a classic example of the often-repeated narrative highlighting the difference in progress between China and India.
  • This narrative is based on statistics to demonstrate that India and China were in similar situations until the late 1980s.
  • However, it is more of a China’s story as to how China has made significant leaps forward since then, surpassing India by a considerable margin.

A Comparative Analysis Between India and China in Maritime Industry

• Historical Background
  • India had a head start in the maritime sector until the late 1980s and the country had a tradition of modern ship-owning,
  • This was exemplified by a former Indian Navy officer who commissioned giant oil tankers, marking a unique contribution to the global maritime landscape.
  • On the other hand, China was a late entrant to the global merchant shipping scene.
  • However, by the end of 2020, it had emerged as the builder of half of all ships worldwide, a remarkable feat driven by a dedicated government plan to boost shipbuilding and ownership.
• Shipbuilding and Ownership
  • While India had private players entering the shipping industry, the focus was primarily on expanding the seafarer population.
  • However, ship owning, chartering, financing, and building remained largely out of reach for Indian entities.
  • The state-owned Shipping Corporation of India faced challenges, impacting the order books of Indian shipyards.
  • And China, driven by a government-led plan, became a global leader in shipbuilding and by 2020, it was producing half of the world's ships.
  • Chinese shipowners played a pivotal role, often building most of their ships at state-owned government yards.
• Labour and Seafarer Contribution
  • India's main source of growth and foreign exchange earnings in the maritime sector has been the supply of labour.
  • Indian seafarers, known for their proficiency in English, became a routine presence in global shipping.
  • The UPA government decentralised maritime training, leading to institutions across the country producing seafarers of various grades and competencies.
  • While specific data on Chinese seafarer contribution is not provided, India's seafarers and their management companies were estimated to bring in around $6 billion in foreign exchange annually, showcasing a significant contribution to the country's economy.
• Government Role and Industry Strategy
  • Successive Indian governments have primarily focused on expanding the seafarer population.
  • However, ship owning, chartering, and building have not seen significant progress, with state-owned entities facing challenges.
  • On the other hand, China's success in shipbuilding is due to a dedicated government plan.
  • The state played a crucial role in supporting shipbuilding activities, and Chinese shipowners largely built their ships at state-owned yards.

Reasons Behind India’s Negligible Share in Shipbuilding and Owning

• Vague Roadmap of the Maritime Agenda 2020
  • The UPA government came up with a Maritime Agenda 2020 that sought to increase India’s share of global shipbuilding from less than 2% to a modest 5% in a decade.
  • The agenda proposed a vague road map that included Sops to achieve it.
  • However, by 2020 India’s share in global shipbuilding had dropped to practically zero, instead of going up.
• Similar Approach by Current Government’s Maritime India Vision 2030
  • The current government’s Maritime India Vision 2030 has outlined 10 key themes that include logistics, environment concerns, port infrastructure and increase in seafarer growth and training.
  • The vision document does not mention any plan for shipbuilding and owning.
  • There is talk of Sagarmala but the yards are seeing only naval ship orders.

Way Forward: Make Shipbuilding and Owning an Integral Part of Maritime Vision

• In India, with a long coastline and a strategic location as the geographic pivot of global shipping, shipbuilding would be an integral part of any serious attempt to speed up manufacturing capacity and deepen strategic power.
• Shipbuilding and owning would give India a seat at the table not only in the global maritime industry but also enhance its presence in the international trade scene too.
• Just as overall industrial might is integral to military might, shipbuilding is integral to a strong naval base as well.
  • For example, in the movie Oppenheimer, there is a discussion about the selection process for the Japanese cities to be targeted with atomic bombs.
  • However, the film does not explicitly mention that Nagasaki was chosen because the naval shipyard there was actively producing naval boats and needed to be eliminated.
  • Ironically, the bomb missed the shipyard and instead obliterated a civilian area.
  • Despite this, the Nagasaki shipyard has managed to persist and thrive, evolving into an advanced merchant shipyard that is still operational today.

Conclusion

• The Yangtze River stands as a testament to China's maritime success, blending tradition with modernity.
• In contrast, India's maritime narrative reflects a historical advantage eroded by challenges in shipbuilding and ownership.
• Recognising the strategic importance of shipbuilding, India must develop a comprehensive plan to revitalise its shipbuilding industry, not only for economic growth but also for a stronger presence in the global maritime and trade arenas.

Q1) What is the objective of Maritime India Vision 2030?

The government will build three mega major ports each with a capacity of over 300 million tonnes of cargo, raise the level of Indian cargo trans-shipped within the country to over 75 per cent from 25 percent.

Q2) What is the International Maritime Organisation?

IMO – the International Maritime Organization – is the United Nations specialised agency with responsibility for the safety and security of shipping and the prevention of marine and atmospheric pollution by ships. IMO's work supports the UN SDGs. As a specialised agency of the United Nations, IMO is the global standard-setting authority for the safety, security and environmental performance of international shipping. Its main role is to create a regulatory framework for the shipping industry that is fair and effective, universally adopted and universally implemented. 

Source: The Hindu