New Delhi: Admiral Karambir Singh, Chief of the Naval Staff, Indian Navy said on Thursday that there is enough headroom in mercantile marine sector for India to attain the critical mass and become a hub for defence shipbuilding. Speaking at the ‘International Seminar on Nation Building through Shipbuilding,’ organised by FICCI, Admiral Singh said that shipbuilding can contribute immensely to the vision of making India a $5-trillion economy by 2024.
“As India’s shipbuilding industry matures, there is immense potential to forge strategic partnerships and convert India into a hub for defence shipbuilding exports and repairs to friendly foreign countries,” said Admiral Singh.
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‘India needs to harness the headroom’
However, to enable the strategic outcomes, there is a need for the nation to achieve a certain critical mass in indigenous ship production and repair capability, he said.
“While defence shipbuilding plays an important role, we actually need to harness the headroom which is available in sectors such as mercantile marine and coastal shipping to increase capacities and attain our true potential,” Admiral Singh added.
‘Indian Navy committed to Make in India’
Dwelling on Indian Navy’s shipbuilding initiatives and its linkage to nation-building, Admiral Singh said that the Navy was fully invested in encouraging the indigenous shipbuilding ecosystem for 50 years before Make in India became a national mission.
“More than 60 percent of the naval budget is dedicated to capital expenditure and nearly 70 percent of this capital budget has been spent on indigenous sourcing amounting to nearly Rs 66,000 crore in the last five years. Since the launch of Make in India in 2014, 80 percent of the AoNs (Acceptance of Necessity) on cost basis have been awarded to Indian vendors. Of the total 51 ships and submarines on order at various shipyards as on date, 49 are being constructed indigenously,” he noted.
He added, “Nearly, 90 percent of ship repair by value is undertaken by Indian vendors and mostly MSMEs, implying that in addition to the capital budget a high proportion of Navy’s revenue budget is also being ploughed back into the economy.”
‘Cost overrun a challenge’
Admiral Singh explained how shipbuilding created logistics, spares and project support ecosystems, new capacities within shipyards, employment generation and skill development. He also said time and cost overruns in ship construction created challenges for the navy.
“Studies show that labour employed for a given sum of industrial turnover is one of the highest in shipbuilding industry. Besides, the multiplier effect of one worker employed in a shipyard is about 6.4 in ancillary industries,” he said.
‘Need a comprehensive policy’
Admiral Sunil Lanba, Chairman, National Maritime Foundation (NMF) and former Chief of the Naval Staff said, “We need a comprehensive policy and support which will address all three segments — construction, repair and breaking.”
‘Navy has a long-term perspective plan’
Vijayendra, Joint Secretary (NS) and CVO/DDP, Department of Defence Production, Ministry of Defence, said that the Navy has a long-term perspective plan for 2015-30 laying out in detail as to what items will be indigenised by local vendors.