Indian shipbuilders struggling for new orders have reasons to cheer. The Make in India and the policy on shipbuilding recently approved by the cabinet have come at a time when the industry is facing recession in global shipping and cost disadvantages when compared with the Japanese, South Korean and Chinese yards, said Madhu S. Nair, chairman and managing director of state-owned Cochin Shipyard Ltd. Edited excerpts:

Has the Make in India initiative come at the right time for India’s shipbuilding industry?

The Indian shipbuilding industry is going through one of its worst times due to the recession in global shipping. The crash in oil prices has wiped out whatever little ordering was happening on the offshore vessel front.

Under the circumstances, the Make in India initiative to tap and channelize all Indian vessel requirements within the country is nothing short of a survival injection for the industry.

The prime minister’s flagship programme Make in India would not have come at a more opportune time for us. It is commendable on the part of the ministry of petroleum and natural gas to ask GAIL (India) Ltd to stipulate that one-third of the total LNG (liquefied natural gas) carriers it requires for shipping LNG from the US have to be built in India. The defence ministry is also expected to resort to strategic partnerships towards Make in India for their fleet expansion.

The cabinet had recently approved a policy for the shipbuilding sector. Will it help?

Yes. The government has cleared a package for the shipbuilding industry. The highlights of the policy includes financial assistance, a so-called right of first refusal on all government purchases both for shipbuilding and ship repair for Indian shipyards, tax incentives and infrastructure status. All these would definitely give a much-needed boost to the shipbuilding industry.

What are the strengths of India’s shipbuilding industry that can be tapped to make India a more attractive destination for global fleet owners?

The perception that it is the cheap labour which attracts global fleet owners to India is totally wrong as far as shipbuilding industry is concerned. Our greatest advantage is our quality workforce. With the skill development programme in place, and a programme for our people to be trained at workplaces of international repute, we should be able to harness our skills to be a major player in South Asia.

Given my association with Cochin Shipyard for many years, I can tell with conviction that the international fleet owners look for quality and timely delivery at a competitive price. Cochin has all the attributes to make it big on the international scene by strictly conforming to their standards. We have had difficulties in the past on pricing, especially against China, due to a variety of reasons, but the shipbuilding support scheme cleared by the cabinet will address this differential to a large extent.

Availability of skilled workforce is the greatest strength of the Indian industry, particularly for us. Cochin Shipyard has been securing shipbuilding contracts from international owners at reasonably competitive prices and timelines, which proves that Indian yards can be successful in global markets. This is possible mainly due to the skilled resources and our design capabilities.

What kind of strategies and infrastructure are being put in place by the yard?

We are moving ahead with our efforts to build the three LNG carriers out of the nine being tendered by GAIL Ltd. We have acquired the coveted LNG containment technology licence from French firm Gaztransport & Technigaz (GTT) and tied up with South Korea’s Samsung Heavy Industries Co. Ltd on technology for building LNG carriers.

With this, Cochin has completed all the requirements to be licensed by GTT to build ships for any client worldwide using their patented Mark-III technology.

Cochin has become the first shipyard in India to obtain this coveted licence from GTT. This is a great achievement for Cochin and India considering the fact that only a handful of shipyards in Korea, Japan and China have constructed such LNG carriers.

Our association with Samsung and their training and support have also helped us a lot in achieving this feat. Cochin now meets all conditions of the GAIL tender and is ready to submit bids.

Construction of a new dry dock is also being taken up. The new dry dock will have the capacity to take larger vessels such as aircraft carriers, oil rigs and semi-submersibles, apart from LNG ships.

What should India focus on now?

Shipbuilding clusters and maritime parks are some of the concepts practised in some major shipbuilding nations. We should encourage ancillary industries, system providers and go for more indigenous components.

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