According to an ET report, the move is in line with India's ambitious goal of being among the top 10 shipbuilding nations by 2030, as outlined in the Maritime India Vision 2030, and reaching the top five by 2047, as detailed in the Maritime Amrut Kal Vision.
Currently, India ranks 20th in the global commercial shipbuilding market with a modest share of 0.05%. Indian-owned and flagged ships meet about 5% of the country's total overseas freight requirements.
Shipbuilding plans
India's potential commercial shipbuilding market is estimated to be worth $62 billion by 2047, according to a document prepared by KPMG for a workshop organised by the Ministry of Ports, Shipping and Waterways on July 4.
Adani's shipbuilding plan is part of Rs 45,000 crore expansion project Mundra PortThe company, which recently received environmental and coastal regulation zone clearance, has given details of its plan as found in the minutes of the meeting of the Expert Appraisal Committee (EAC) attached to the Ministry of Environment, Forest and Climate Change. The committee approved the proposal on May 15.
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Unlike a new entrant, Adani has the advantage of already having the necessary land and environmental clearances, which will help the group quickly enter the heavy engineering sector, which will be its first venture in the sector.
Adani Group's entry into the shipbuilding sector coincides with the global shipping industry's gradual shift towards eco-friendly vessels to achieve decarbonisation goals.
According to one estimate, more than 50,000 ships would need to be built over the next 30 years to replace the existing fleet.
According to KPMG, the ancillary industry, which includes tier 1, 2 and 3 suppliers, is expected to add $37 billion in value by 2047, potentially creating about 12 million jobs. To achieve the targets set by the Maritime India Vision 2030 and the Amrut Kal Vision, Indian shipyards must increase their annual production from the current 0.072 million gross tonnes (GT) to 0.33 million GT by 2030 and 11.31 million GT per annum by 2047.
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India currently has eight government-owned shipyards and about 20 private facilities, including one operated by Larsen & Toubro Limited (L&T) at Kattupalli near Chennai. Except for Cochin Shipyard Limited, which is listed on the Mumbai Stock Exchange and comes under the Ministry of Ports, Shipping and Waterways, the other government-owned yards are managed by the Ministry of Defence. However, all these yards focus primarily on building government-funded naval ships, which are considered a safer and risk-free option compared to commercial vessels.
Public sector yards occasionally take small commercial orders when spare capacity is available and not busy with naval shipbuilding. Among private yards, L&T builds only defence ships, having entered the sector during the last shipbuilding boom of 2005-07. However, by the time L&T began operations, the world was already in the midst of the global financial crisis, forcing the company to shift its focus to defence shipbuilding to remain viable.
According to KPMG, capacity available at shipyards to build commercial ships is limited, as the industry is primarily focused on naval vessels.