Russia & India – Trade & Prospects in the shipbuilding sector

Date: 26.02.2021

New Delhi

About EEPC India

• Set up in 1955, under Ministry of Commerce & Industry, GoI

• Over 13300 members (>70% from MSMEs)

• 42 engineering panels, covering the entire engineering vertical & horizontal supply chain

• BMO accredited by QCI-NABET India

• Full member of the France-based UFI – the Global Association of the Exhibition Industry

Policy AdvocacyTrade

PromotionBusiness

PartnershipsInhouse

PublicationsPublications

Technology Upgradation

• Established foundations for Heavy Engineering sector in India such as in Mining, Metals, Capital Goods & Machine Building sectors

• Major partner in the Niche Engineering sectors such as Defence & Aerospace

• As the majority of shipbuilding orders to the shipyards in current times in India are primarily from Indian Navy and Coast Guard, Russia is an important defencetechnology partner.

• Labour employed for a given sum of industrial turnover is one of the highest in the shipbuilding industry. Besides, the multiplier effect of one worker employed in a shipyard is about 6.4 in ancillary industries

Why Russia is important for India

HS6 Shipping Products Exports 2015 2016 2017 2018 20198905 Light-vessels, fire-floats, dredgers, floating cranes, and other

vessels the navigability of which is subsidiary to their main function; floating docks, floating or submersible drilling or production platforms (excluding fishing vessels and warships)

2.76 1.88 3.47 2.05 4.13

8901 Cruise ships, excursion boats, ferry-boats, cargo ships, barges and similar vessels for the transport of persons or goods

0.33 0.38 0.30 0.57 1.06

8906 Vessels, incl. warships and lifeboats (excluding rowing boats and other vessels of heading 8901 to 8905 and vessels for breaking up)

0.50 0.14 0.31 0.42 0.34

8904 Tugs and pusher craft 0.39 0.81 0.53 0.51 0.28Total 4.00 3.22 4.61 3.56 5.80

US$ Billion

India’s major Exports in Shipbuilding

HS6 Russia Shipping Products Imports 2016 2017 2018 2019 20208901 Cruise ships, excursion boats, ferry-boats, cargo ships, barges

and similar vessels for the transport of persons or goods1.056 1.488 0.938 1.115 1.048

8905 Light-vessels, fire-floats, dredgers, floating cranes, and other vessels the navigability of which is subsidiary to their main function; floating docks, floating or submersible drilling or production platforms (excluding fishing vessels and warships)

0.357 0.544 0.419 0.123 0.290

8902 Fishing vessels; factory ships and other vessels for processing or preserving fishery products (excluding fishing boats for sport)

0.089 0.116 0.036 0.252 0.185

8903 Yachts and other vessels for pleasure or sports; rowing boats and canoes

0.032 0.086 0.048 0.074 0.117

Total 1.995 2.371 1.555 1.744 1.736

US$ Billion

Russia’s major imports in Shipbuilding

• Indian fleet saw modest increase of 9.7%, from 11.55n to 12.68m tonnes, bw 2017-20.

• Strong MSMEs support ecosystem in Ship building & Repair

• Each Shipbuilding Project has created logistics, spares and project support ecosystems, comprising OEMs, ancillary industry, and MSMEs.

• Three public entities (Goa Shipyard Limited, Cochin Shipyard Limited and Hindustan Shipyard Limited) & three private Shipyards (PipavavShipyard, Bharati Shipyard and L&T Shipyard) have the infrastructure and capacity to build large vessels.

Source: https://maritimeinvest.in/

Indian Shipbuilding Capabilities

• As a result of Make in India & AatmaNirbhar Bharat Vision, Naval Shipbuilding is becoming more indigenized.

• Currently over 40 out of a total of 51 naval ships and submarines on order are being constructed in Indian shipyards.

• Cochin Shipyard to build autonomous electric vessels for ASKO Maritime, Norway

Recent Advancements

• India's first maritime cluster is being set up near Verna, Goa as Konkan Maritime Cluster.

• The maritime cluster, comprises 49 Goan enterprises, to utilise 14,380 sqm of land to setup a world-class common facility for manufacturing, design and allied services for the shipbuilding industry.

• Other Maritime Clusters are proposed in Tamil Nadu & Gujarat

Clusters Level Initiatives

• Russia & India act as a gateway to the growing markets of CIS & South Asia

• Over 80 per cent of the global merchandise trade and 90 per cent of India’s international cargo volume are transported over water.

• India is host to one of world’s most important trade crossing — connecting the Far East with Europe. Nearly 50 per cent of container traffic and over 70 per cent of trade in energy sails through this region.

• India’s existing fleet requires major revamp. With the average age increasing from 15 to 20 years in the last two decades.

Russia – India Potential in Shipbuilding Partnership

• Reduction in GST from 18% to 5% on bunker fuel used in Indian flag vessels,

• Providing cargo support to the Indian shipping industry through right of first refusal (RoFR)

• Bringing parity in the tax structure of Indian seafarers

• Removal of licensing requirements for chartering of foreign-registered ships for encouraging coastal movement of several items.

The Recent Government Incentives

• Facilitate Engagements across the manufacturing clusters in Steel, Metal Fabrication, Engineering Design & Development, ICT, Ancillaries & Services in India

• Organize BSM & RBSM Delegations / Virtual B2Bs Webinars & Conferences

• Vendor Development Programmes – EEPC India has strong linkages with PSUs & Large Manufacturers in India. Regularly organize Vendor Development sessions for both Indian & Overseas buyers

• Vendor Development & Sourcing Meets for Global MNCs

How EEPC India may facilitate Trade & Partnerships in Shipbuilding

• With growing Economy, India’s shipbuilding Industry is on the threshold of major overhaul.

• Collaborations to upgrade the value chain and cost competitiveness

• Strategic Partnerships is the need of the hour.

The Future

Thank You!