Latest news with #MaritimeDevelopmentFund
Mint
2 days ago
- Business
- Mint
State-run GRSE inks ship building deals with German firm
New Delhi: State-run defence manufacturer Garden Reach Shipbuilders and Engineers Ltd (GRSE) has tied up with Germany's Carsten Rehder Schiffsmakler und Rehder GmbH & Co. KG, for building four vessels, the ports, shipping and waterways ministry said on Thursday. The deal for building four 7,500-deadweight tonnage (DWT) vessels was signed in Oslo on 4 June in the presence of Union ports, shipping and waterways minister Sarbananda Sonowal, the statement said. These vessels will have hybrid propulsion and will be adhering to the latest cyber security norms. This is in addition to an existing order for eight such vessels currently being built at GRSE's Kolkata yard. GRSE also signed deals with UAE-based Aries Marine LLC for building offshore platforms and vessels. This move is expected to help modernize port facilities, improve multimodal logistics, and enable port-led industrial growth, said Sonowal. Another deal was signed between India's Larsen & Toubro (L&T) group and Norway's DNV for collaboration in areas including shipbuilding, said the statement. Speaking on the occasion, Sonowal said, 'As two proud maritime nations with extensive coastlines and rich oceanic traditions, we understand that the future of the blue economy hinges not just on development—but on sustainable, inclusive, and resilient growth. It gives me immense pleasure that many Indian companies are signing MoUs including those from Norway, further deepening our commitment to collaborate in maritime sector.' Sonowal added, 'Our governments are also working closely on green shipping corridors, decarbonization efforts, ship recycling, and capacity building. The India-Norway Task Force on Blue Economy stands as a cornerstone of this deepening engagement.' Mint reported on 29 April that the expenditure finance committee had cleared a ₹ 25,000-crore Maritime Development Fund for FY26, a project to lend long-term, low-cost financial support for indigenous ship-building and other blue water infrastructure projects. On 5 June, GRSE shares opened at ₹ 3,399, up from the previous close of ₹ 3,358.50, and surged 4.80% to reach a record high of ₹ 3,520.
Time of India
4 days ago
- Business
- Time of India
Shipyards may lack punch as FinMin pitches for lower quantum in Ship Building Financial Assistance Policy 2.0, ET Infra
Advt Advt By , ETInfra Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis. Get updates on your preferred social platform Follow us for the latest news, insider access to events and more. The much-awaited Ship Building Financial Assistance Policy 2.0 will likely see a lower quantum of aid for different categories of ships than the one mooted by the Ministry of Ports , Shipping and Waterways with the Ministry of Finance pitching for a lesser percentage, a move that is expected to hurt local shipbuilders while competing with global yards for to the proposal piloted by the Ministry of Ports, Shipping and Waterways, shipyards would be entitled to get 20 per cent extra as government aid on the cost of constructing a normal ship, 25 per cent as financial assistance for building special category vessels including oil, gas, chemical tankers and container ships and 30 per cent extra for green ships and other vessels with futuristic quantum of financial assistance will be static for the duration of the scheme that will run through March 2035 with possible extension up to 2047 to give 'long term visibility' to the yards while booking the Ministry of Finance is said to have advocated a lower quantum of financial assistance for building ships: 15 per cent for normal ships, 20 per cent for large ships and 25 per cent for specialised vessels including green ships, potentially chopping off 5 per cent from each of the categories suggested by the Ministry of Ports, Shipping and Waterways, sources revamped Ship Building Financial Assistance Policy was appraised in March by the Expenditure Finance Committee (EFC), headed by Secretary (Expenditure) in the Ministry of Finance, basis which the Ministry of Ports, Shipping and Waterways has prepared a note for the consideration of the Union Cabinet Finance Minister Nirmala Sitharaman announced a ₹25,000 crore Maritime Development Fund , a revamped Ship Building Financial Assistance policy, credit note for shipbreaking in Indian yards and infrastructure status to large ships in the February 1 Union Budget.'For long term financing of the maritime industry, a Maritime Development Fund with a corpus of ₹25,000 crore will be set up,' Nirmala Sitharaman said in her Budget speech to Parliament. This will be for distributed support and promoting Ship Building Financial Assistance scheme will be revamped to address cost disadvantages, Sitharaman said. This will also include credit notes for shipbreaking in Indian yards to promote the circular large ships above a specified size will be granted infrastructure status to help access long-term, low-cost funds, Sitharaman pledged while unveiling the the existing Ship Building Financial Assistance scheme that started from April 1, 2016, for a ten-year period, the quantum of aid is reduced by three percentage points every three years, starting with 20 per cent during the first three years, 17 per cent for the subsequent three years, 14 per cent for the next three years and 11 per cent in the tenth the Ministry of Ports, Shipping and Waterways recently amended the norms for implementing the Ship Building Financial Assistance scheme by removing the cap of ₹40 crore for constructing a non-specialised ship within three years from the date of the amendment, the Ministry also retained the quantum of aid at 14 per cent instead of the 11 per cent agreed earlier for the 10th year of the scheme that ends in March 2026 after a ten-year shipbuilders lobbied for removing the ₹40 crore cap on financial assistance per ship, saying that the upper limit was introduced when the shipbuilding prices were low.'However, due to various factors impacting supply chains, raw materials and equipment pricing, the global ship building prices have increased by about 80 percent,' said an executive with a private new regulatory guidelines for lowering carbon emission and emphasis on using green fuels have forced change in technology and the resultant higher capital investment for building a result, ships that were built at, say, ₹100 crore are currently costing more than ₹200 crore. Indian shipyards are now aiming to build ships of higher value.'The financial assistance for such high value vessels will exceed ₹40 crore at 14 per cent itself. If the vessels being built are capable of running on alternate fuels or are hybrid, then the cap of ₹40 crore will be of very low value and will be insufficient for local yards to compete with Chinese and other Southeast Asian shipbuilders who also receive substantial support from their respective governments,' the private shipyard executive were of the view that the removal of ₹40 crore cap will help India secure high value shipbuilding projects, boosting export value and higher shipyards reckon that a lower quantum of financial assistance preferred by the Finance Ministry in the revamped scheme would hinder their ability to compete with Chinese and South Korean yards for holds less than 1 per cent (0.06 per cent) of the global shipbuilding market and is ranked 20th in the industry but aims to break into the top 10 ranking by 2030 and top 5 by has the lowest labour costs - a key factor deciding a nation's competitive position in the labour-intensive shipbuilding this advantage has not translated into cost effectiveness because of factors such as reliance on import of key raw materials used in making ships and higher financing costs. India's dependence on imports for most of the inputs consumed in shipbuilding puts cost pressure on local shipbuilding yards suffer from systematic cost and price disadvantages of around 25-35 per cent compared to South Korea, Japan, Vietnam, Indonesia, Malaysia and Philippines, among other cost differential is sought to be offset through the financial assistance China, being one of the cheapest steel makers in the world, helps its yards to reduce costs and lower shipbuilding prices in the global market.
Indian Express
31-05-2025
- Business
- Indian Express
On marine engine production, India must set sail on its own
India is making bold moves in shipbuilding. The 2025 Union budget laid the foundation for a maritime resurgence, with mega clusters, a Rs 25,000-crore Maritime Development Fund, customs duty exemptions, and infrastructure status for large vessels. Strategic tie-ups with global shipbuilding giants and major private investments signal serious intent to make India a top five shipbuilding nation by 2047. To truly lead, India must build what powers the ship. A hull without an engine is just a shell, strategically dependent on foreign suppliers. Marine engines typically account for 15–20 per cent of a ship's cost and are central to its performance, emissions, and life cycle. Presently, over 90 per cent of engines rated above 6 MW installed on Indian commercial and naval vessels are sourced from a concentrated group of five global manufacturers — MAN Energy Solutions (Germany), Wärtsilä (Finland), Rolls-Royce (UK), Caterpillar-MaK (US/Germany), and Mitsubishi Heavy Industries (Japan). This oligopolistic concentration creates a technological chokepoint. Any disruption in diplomatic or trade relations, export control regime, or intellectual property licensing can effectively immobilise India's shipbuilding programme. These engines are embedded with proprietary ECUs, closed-source control software, and IP-restricted components, making India dependent on foreign firms not just for procurement, but for diagnostics, updates, and even spares. This exposes India to rising export control risks. Key supplier countries have tightened regulations under frameworks like the EU Dual-Use Regulation, US EAR, and Japan's METI controls. These can be denied on national security grounds at any time. India has already begun taking steps in this direction. In April, the Indian Navy signed a Rs 270-crore sanction order with Kirloskar Oil Engines Limited to design and develop a 6 MW medium-speed marine diesel engine. However, the real game is for 30MW. There are several challenges. First, we lack access to modern marine engine designs. Marine engine design is a critical determinant of propulsion efficiency, thermal performance, emissions compliance, structural durability, and system integration in large vessels. These designs must optimise key parameters to meet International Maritime Organization Tier III emission standards and enable integration with hybrid propulsion, waste heat recovery. India currently lacks indigenous design capabilities. This leads to dependence on foreign OEMs. This dependency restricts the ability to modify engines for military profiles, optimise for local climatic and operational conditions, or transition to fuel-flexible, autonomous maritime systems. Second, India's most significant hurdle in building large marine engines is metallurgical, a foundational challenge that cuts across materials science, manufacturing precision, and component durability. Marine engines operate under extreme thermal and mechanical conditions. Components must be engineered from alloys that can withstand high thermal gradients, resist corrosion in saline environments, and perform reliably over long duty cycles. Materials like high-chromium steels, nickel-based superalloys, and thermally stable composites are essential, but India's capacity to produce such materials in large quantities remains underdeveloped. This is where we are struggling in our jet engines programme, too. Third, 'tribology', the science of wear, lubrication, and friction, is another critical bottleneck. High-efficiency marine engines demand components with tailored surface properties to reduce wear and frictional losses over thousands of operating hours. This necessitates advanced coatings like thermal barrier ceramics, diamond-like carbon and plasma-sprayed composites, which require both sophisticated application techniques and precision control. Additionally, machining these heavy components requires large-format CNC equipment, micrometre-scale metrology systems, and ultra-tight tolerances, particularly for parts like crankshafts and cylinder blocks. India's ecosystem lacks scalable industrial integration. Fourth, it's impossible to build next-gen marine engines when our top institutes still train students on outdated models. These belong in museums, not classrooms. With India hosting the world's largest ship-breaking yard at Alang, institutes should at least source decommissioned modern engines from there to upgrade training. To address these gaps, India must shift its strategy from relying solely on large public- and private-sector firms, which have struggled to deliver full-stack indigenous marine engines, and instead invest in a new generation of tech start-ups. Startups can bring agility, risk-taking and cross-disciplinary innovation. The government should facilitate this through targeted innovation missions, design-linked incentives, and dedicated funding for marine propulsion R&D, backed by defence and shipping sector demand. Institutions like IIT Madras can serve as anchor nodes, supporting venture creation with lab-to-market pipelines. Start-ups must be supported not only with capital, but also through access to testbeds, IP support, and public procurement guarantees. To develop large marine engines, India must build a dedicated propulsion design ecosystem. Equally critical is access to domain-specific software for 3D modelling and mechanical design; combustion and thermodynamic simulation; structural and thermal stress analysis; and embedded control system development. India has made visible strides in other areas of shipbuilding. New yards are coming up, older ones are being modernised, and maritime ambitions are growing. But without the ability to build our own marine engines, we are laying the keel for dependency. Just as the Tejas fighter still flies on imported engines, our ships risk sailing under the shadow of foreign dependency. A vessel may be built in India, flagged in India, and crewed by Indians, but unless we build the engine, we will never truly steer our own course. Sanyal is member, EAC-PM and Sinha is a writer on state capacity, economic policy, and institutional reform. Views are personal
Indian Express
21-05-2025
- Business
- Indian Express
Govt to boost production of Made-in-India merchant vessels, cut reliance on foreign ships
The Centre has set the ball rolling to increase the fleet of large 'Made in India' merchant ships with an eye on joining the league of the top maritime countries of the world over the next two decades. The move stems partly from a realisation that a large fleet of merchant ships made in India is required, since foreign ships that transport merchandise to and from India may choose to stay away in case of an emergency. A situation like the recent three-day escalation between India and Pakistan can put ports on high alert, and may dissuade foreign ships from visiting Indian ports, thus harming trade. The government also feels that becoming a maritime power is an essential part of being a 'developed nation' — something that the government hopes to become by 2027. 'We need our own ships to replace foreign ships, as the latter may stay away in an emergency situation, and that will harm our global trade. The policy of the government is to take strides in this direction over the next decade or two,' said a highly placed source in the Ministry of Ports, Shipping and Waterways. 'Initiatives have been launched to boost indigenous shipbuilding and repair capabilities, reducing dependence on foreign vessels. India is advancing towards becoming the top 10 shipbuilding nations by 2030 and to ascend to the top five by 2047,' said an official. Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal told The Indian Express: 'India has everything it requires to be a global shipbuilding powerhouse. Our strategic location, technological expertise, demographic and cost advantage, and robust steel industry are there.' 'Further, recent radical policy reforms ushered in by our government by way of Maritime Development Fund, Shipbuilding Financial Assistance Policy, Shipbuilding and Ship Repair Clusters, infrastructure status to large vessels, customs duty exemption to components used in ship building and ship repair, comprise a comprehensive package to kickstart a revolution to repost India's shipbuilding industry on the pinnacle of global shipbuilding arena,' the Union minister said. A ministry note explains the major policies that have been set in motion to achieve this ambitious target. In the Union Budget 2025, a Rs 25,000-crore fund has been set up under Maritime Development Fund to provide long-term, low-cost financing for shipbuilding, repair, and maritime infrastructure projects. The government will contribute 49 per cent of the fund, with the remainder to be mobilised from ports and the private sector. This initiative is expected to generate investments of up to Rs 1.5 lakh crore by 2030. With an outlay of Rs 18,090 crore, Shipbuilding Financial Assistance Policy (SBFAP) 2.0 offers direct financial subsidies to Indian shipyards to enhance their competitiveness in the global market. 'To promote sustainable practices, a 40 per cent credit note on the scrap value of old ships is to be provided under the Shipbreaking Credit Note Scheme for shipbreaking in Indian yards. This credit can be used towards the purchase of new 'Made in India' vessels. The customs duty exemption on inputs used for shipbuilding and ship-breaking has been extended for another 10 years, reducing production costs and encouraging domestic manufacturing,' according to the note. 'Global centre for maritime finance' SCI Bharat IFSC Ltd was incorporated on August 12, 2024, as a shipping company, with its registered office at GIFT House, GIFT City, Gandhinagar, Gujarat, to undertake chartering, owning of vessels and other permitted shipping activities as per the ship leasing framework of the GIFT IFSC. 'The establishment of a new shipping company, in collaboration with state-run oil, gas, and fertiliser companies, aims to expand India's fleet by at least 1,000 ships over the next decade. This initiative will reduce reliance on foreign shipping services and cut freight costs by at least 33 per cent by 2047,' says the ministry note. 'As of now, most of the big ships are foreign, and we may be having just 50-60 large ships, in a total fleet of about 1,500 merchant vessels. We need to take a quantum jump in building 'Made in India' ships, and the present policy is designed for that,' said an official. India is already a leading global player in ship recycling. In 2024, India was the second-largest global ship recycling nation by tonnage. India's share in the global ship recycling industry was around 33 per cent in 2023, accounting for one third of the total global tonnage dismantled. The Alang Ship Breaking Yard in Gujarat is a major hub for ship recycling in India, responsible for dismantling a significant portion of retired ships. The next aim, thus, is to make India a leader in shipbuilding too – the idea being to strengthen the maritime triad of shipbuilding, repairing and recycling. Vikas Pathak is deputy associate editor with The Indian Express and writes on national politics. He has over 17 years of experience, and has worked earlier with The Hindustan Times and The Hindu, among other publications. He has covered the national BJP, some key central ministries and Parliament for years, and has covered the 2009 and 2019 Lok Sabha polls and many state assembly polls. He has interviewed many Union ministers and Chief Ministers. Vikas has taught as a full-time faculty member at Asian College of Journalism, Chennai; Symbiosis International University, Pune; Jio Institute, Navi Mumbai; and as a guest professor at Indian Institute of Mass Communication, New Delhi. Vikas has authored a book, Contesting Nationalisms: Hinduism, Secularism and Untouchability in Colonial Punjab (Primus, 2018), which has been widely reviewed by top academic journals and leading newspapers. He did his PhD, M Phil and MA from JNU, New Delhi, was Student of the Year (2005-06) at ACJ and gold medalist from University Rajasthan College in Jaipur in graduation. He has been invited to top academic institutions like JNU, St Stephen's College, Delhi, and IIT Delhi as a guest speaker/panellist. ... Read More
Time of India
21-05-2025
- Business
- Time of India
Sustainable shipping in India is becoming more closely linked to economic competitiveness: Johnson Controls' Arun Awasthy
The maritime sector is a major source of carbon emissions globally. As a part of its efforts to limit emissions, the Indian government is implementing various measures to promote environmental sustainability and the advancement of its maritime sector. However, the real benefit of sustainable shipping will be realised when Indian ports and fleets are seen globally as not just larger but smarter and lower-risk partners, said Arun Awasthy , President & Managing Director, Johnson Controls India. He emphasised this point while acknowledging India's maritime initiatives, which range from green hydrogen hubs to shore-power mandates. In the Union Budget 2025, the Indian government has proposed to set up a Maritime Development Fund with a corpus of Rs 25,000 crore. Through this fund, the government aims to encourage green investments and sustainability in the shipping and maritime infrastructure. In addition, the Ministry of Ports, Shipping, and Waterways has prioritised the decarbonisation of the shipping sector through initiatives like the Green Tug Transition Program and Harit Nauka (Green Vessel). Johnson Controls India, the local arm of Ireland-based sustainable infrastructure firm Johnson Controls, has been working with the Indian shipping industry to promote long-term sustainability and energy efficiency. 'Johnson Controls' focus is on enabling that outcome through technologies that support efficiency, safety, and compliance without compromising the operational realities the sector faces,' Awasthy said. The country's increasing focus on sustainability, energy efficiency, and digitalisation positioned India as a strategic growth market for Johnson Controls, considering the scale of infrastructure expansion. 'We are investing in expanding our local capabilities, both in engineering expertise and service support, to deliver faster, more agile responses to customer needs. At the same time, we are introducing more advanced technologies in building automation, HVAC efficiency, fire and life safety, and security solutions that align with global best practices and India's regulatory and sustainability priorities. We are also closely collaborating with government and private stakeholders to support large-scale initiatives aimed at modernising critical infrastructure with a future-ready approach,' he said. Awasthy emphasised that sustainable shipping in India is increasingly tied to economic competitiveness, not just environmental goals. With global trade corridors shifting and carbon border taxes like the EU's Carbon Border Adjustment Mechanism coming into play, ports that can demonstrate lower emissions will have a strategic advantage. Live Events He pointed out that the government's initiatives, such as the Sagarmala Programme and the establishment of the National Centre of Excellence in Green Ports and Shipping (NCoEGPS), underscore its commitment to port-led development and environmental stewardship. However, the path to sustainable shipping requires a nuanced approach that balances environmental goals with economic and operational realities. 'While India's maritime industry is growing, a significant portion of its fleet consists of older vessels, often ill-equipped to meet emerging environmental standards. Retrofitting these vessels for sustainability, through technologies like alternative fuel engines or energy-efficient systems, requires considerable financial investment, which can be difficult to justify given the long payback periods often associated with such transitions. Moreover, the requisite infrastructure, such as bunkering facilities for low-carbon fuels, is not yet widespread, further hindering the industry's shift toward greener practices,' he said. He added that regulatory alignment with global sustainability standards, particularly the decarbonisation goals set by the International Maritime Organisation, presents another challenge. 'The gap between policy and practice remains, particularly in incentivising private sector participation and accelerating the development of green shipping infrastructure. Navigating this regulatory complexity is essential for creating an ecosystem that fosters long-term sustainability and innovation,' he said. At the same time, India's maritime sector operates within a volatile global trade environment, where geopolitical dynamics influence shipping routes, fuel availability, and operational costs, he said. These factors complicate efforts to transition to a sustainable shipping model, especially when the global supply chain is disrupted, as seen with recent geopolitical tensions. 'In this context, India must strike a delicate balance between domestic economic growth, environmental responsibility, and global competitiveness,' he said. Johnson Controls has contributed to the Indian Navy's aircraft carrier INS Vikrant. Johnson Controls India, in collaboration with our UK-based navy systems team, was responsible for designing and installing the complete HVAC system onboard, Awasthy said. 'The scale and complexity of the project were immense, equivalent to outfitting seven frigates simultaneously, involving over 320 tonnes of ducting across nine fire zones. Our system ensures optimal temperatures for over 1,700 crew members and for critical electronics, aircraft systems, and pilot gear. We also integrated smoke extraction, ventilation, and zonal control panels with the ship's Integrated Platform Management System (IPMS) to enable real-time control and fault response, vital for operational resilience during wartime,' he said. Awasthy mentioned that beyond INS Vikrant, the company has supported other key Indian naval assets, including the Teg-class frigates, ASW corvettes, and Project 17 and 28 vessels, etc. Globally, Johnson Controls has supported marine engineering projects, such as COSCO's $1.6 billion FPSO vessel for the North Sea.
