[Global Times reporter Yuan Jirong]"The Indian shipbuilding industry has ushered in a 'historic moment'." India's "Economic Times" reported on the 15th that the French shipping giant and the world's third largest container transportation company CMA CGM Shipping Group and India's Cochin Shipyard signed a "huge order" for six liquefied natural gas-powered container ships, worth approximately 300 million U.S. dollars. Many Indian media shouted that this is the first time that India has received such a large international order, allowing India to become a "replacement" for major shipbuilding countries such as China and South Korea.
According to reports, the signed container ships will each hold 1700 TEUs and use liquefied natural gas for propulsion, which is consistent with CMA CGM Shipping Group's commitment to decarbonizing shipping. The agreement can be said to be a major achievement for Indian shipbuilders, as the industry has recently strived to establish itself globally. Currently, India's shipbuilding industry ranks 16th in the world, with a market share of less than 1%. India's goal is to enter the top 10 by 2030 and the top 5 by 2047. Rudolf Sade, chairman and CEO of CMA CGM Shipping Group, said that although the company's large ships are still mainly built by China and South Korea, India provides opportunities for small ship construction.
"For India's state-owned shipyard Cochin Shipyard, this order is of great significance." The Economic Times reported that the shipyard built India's first domestically produced aircraft carrier and India's largest tonnage dredger, and also undertook maintenance tasks for some active ships. Cochin Shipyard recently reached a cooperation with shipbuilding giant HD Korea Shipbuilding Marine, which "largely gave CMA CGM Shipping Group confidence and strengthened its determination to sign the order after months of negotiations."
It is noteworthy that the “added value” this “big order” brings to the shipyard in Cochin and other shipyards is exactly what the Indian industry is expecting.This deal could help other Indian shipyards get more orders from large shipowners and further scale.
The report quoted an Indian shipbuilding executive as saying: "With this order, Cochin Shipyard was able to enter the global shipbuilding supply chain. This is not just a matter of demand. More importantly, CMA CGM Shipping Group joins today, and Maersk or Mediterranean Shipping Company may join tomorrow." In addition, the report believes that this order will also "inspire" parts and equipment suppliers to build ecosystems in India.
According to India’s news agency website, India approved a government package of RUB 6972.5 billion (about RMB 56 billion) in September to increase industrial capacity and compete with the old shipbuilding countries. In addition, India has launched the Shipbuilding Financial Assistance Program (SBFAP), which provides 20 to 30 percent financial assistance for ships using green fuel or hybrid propulsion systems. According to the policy, each shipbuilding at the Kochin Shipbuilding Plant receives an additional government subsidy of 20 to 25 percent.
But when it comes to shipbuilding, India also faces many challenges. Some Indian media analysts believe that several major challenges include high infrastructure costs, large gaps in labor and parts, etc. For key components such as engines, propulsion systems and navigation equipment, India still relies heavily on imports. The data shows that Indian shipyards are likely to cost 25% to 30% more than their counterparts such as China, South Korea and Japan.