Indian shipbuilding to grow dramatically

The Indian shipbuilding industry is on a high growth trajectory and is expected to grow at a compound annual growth rate of 30%. In a recent report, a consultancy firm has said that India’s share in global order book is expected to be around 15 % by 2020, compared to the current 0.4%.

The industry, estimated to be $22 billion by 2020, currently contributes less than 0.1 % towards the GDP, a figure which will rise up to 1.1% by 2020. According to industry sources, “In earlier days, the industry was dominated by government shipyards. However, given the growth opportunities today, the private sector has started to expand their operations.” This is also evident from the share of private players in the overall Indian shipbuilding order book, which currently stands at 73%.

The order books reveal that private shipyards are mostly banking on export orders. Out of their total orders share of $2,686 million, export orders account for almost $2,284 million. In the case of the Government owned shipyards, it is the other way around, with domestic orders accounting for $517 million out of their total share of $1,011 million.

“The shipbuilding industry is a totally labour intensive industry and there is dearth of skilled labour in India,” said a Mumbai based shipping analyst. The global order book has registered a 29% compound annual growth rate over the period 2003-06. Going forward, a similar trend is expected on the back of a growth in demand for vessels, which is seen as a result of replacement demand and a boom in the offshore segment