Udupi-Cochin Shipyard Limited (UCSL), the wholly owned subsidiary of Cochin Shipyard Limited (CSL), delivered a batch of ships to its clients. File
| Photo Credit: SPECIAL ARRANGEMENT

A total of 39 shipyards have registered, and 18 shipyards utilised the benefits under the Centre’s scheme to provide financial support to Indian shipyards for shipbuilding contracts signed between April 1, 2016, and March 31, 2026, according to the Economic Survey. 

“India’s Maritime Vision 2030 outlines over 150 initiatives to improve ports, shipping, and inland waterways and envisions investments of ₹3-3.5 lakh crore. The Maritime Amrit Kaal Vision 2047 outlines over 300 initiatives across 11 key areas to drive growth and development in India’s coastal regions,” according to the Economic Survey 2023-24 tabled in the Parliament on Monday.

“Its vision aims to reduce the average vessel turnaround time (containers) from 25 hours in 2020 to less than 20 hours in 2030. Likewise, it also aims to increase the average ship daily output (gross tonnage) from 16,000 in 2020 to more than 30,000 in 2030.”

On the shipbuilding contracts, the survey referred to the Udupi Cochin Shipyard Limited, a wholly owned subsidiary of Cochin Shipyard Ltd., which in May 2023 flagged off five deep-sea tuna long liner cum gill netter fishing vessels built under the Pradhan Mantri Matsya Sampada Yojana. An international ship repair facility was inaugurated at Cochin Shipyard Ltd. in January 2024, the survey noted. “The new dry dock allows building larger ships, including future aircraft carriers, and repairs.”

Focus on coastal shipping, inland water transport

The Economic Survey noted that the Government’s push to foster coastal shipping helped increase the gross tonnage from 1.19 million GT as on April 1, 2014, consisting of 846 vessels to 1.72 million GT with 1039 vessels as on April 1, 2024.

Capital expenditure by the Inland Waterways Authority of India for FY24 was ₹1010.5 crore. Based on feasibility and detailed project reports prepared for 106 new National Waterways (NWs), technical interventions have been planned for safe navigation and shipping on technically viable waterways, according to the Survey. “Over 63% of the Jal Marg Vikas Project on NW-1 has been completed as of March 2024. Phase-I development of NW-3, NW-4, NW-5 & 13 new NWs was approved at a cost of ₹267 crore for 2025-2026.”

The Indo-Bangladesh Protocol (IBP) route, developed jointly by India and Bangladesh at an estimated cost of ₹305.84 crore, provides an alternate connectivity for all northeastern States from Guwahati and Jogighopa to Kolkata and Haldia ports. With the initiatives taken in the last nine years, the cargo handled via the IBP route has increased significantly, the survey added.

Noting that India has a large endowment of rivers, canals, and other waterways, with a total navigable length of around 14,500 km, the Survey said the notification of the Inland Vessels Act 2021, was aimed at replacing the over 100 years old Inland Vessels Act of 1917, making the legislative framework user-friendly.

Union Finance Minister Nirmala Sitharaman with MoS Pankaj Chaudhary and Budget team during giving final touches to the Union Budget, in New Delhi, on July 22, 2024.
| Photo Credit: PTI

Indian airlines need to be strengthened in order to ensure long-haul international air connectivity, the Economic Survey 2024 said.

The emphasis on supporting Indian carriers, it said, was required to plug the leak caused by a large proportion of Indian long-haul international traffic travelling through connectivity hubs in the Middle East and Southeast Asia.

In the recent past, the government has been reluctant to grant requests from various jurisdictions, including Dubai, for allowing them rights to operate more flights into India. At the same time, Air India has strengthened its flight capacity to the U.S. and Europe as well as placed an order for 470 aircraft, including 70 widebody planes capable of flying non-stop on long-haul international routes.

Signalling its foray into long-haul air travel in April, IndiGo too, which thus far only comprised narrow-body planes, announced an agreement with Airbus for a firm order of 30 twin aisle A350s, along with purchase rights for an additional 70 of the same aircraft.

Also read | Economic Survey 2023-24: Higher private sector financing, resource mobilisation key to building quality infrastructure

At an industry event in June, Air India CEO Campbell Wilson urged a clear government policy on bilateral seat capacity, remarking that the airline was ordering new planes on the basis of an “economic return” expected from those investments and therefore if “the rug is pulled from under us, if we can’t fill the aircraft, we will not take them.”

On expanding airport capacity, the Economic Survey notes that while the number of airports in India has doubled since 2014 from 70 to over 140, there was a need to further “augment this capacity by adding more airports as well as expansion/upgradation of existing airports in the next five years” because of a large untapped market. “At around 0.13 air trips per capita, the current passenger air traffic is a fraction of India’s potential,” it noted.

It has also called for the need for “improving the efficiency and viability of airlines” in the backdrop of Go First and Jet Airways entering insolvency in the past five years.

India faces two choices to benefit from ‘China plus one’ strategy and that is either to integrate into China’s supply chain or promote FDI from China. File.
| Photo Credit: AP

Increased foreign direct investment inflows from China can help increase India’s global supply chain participation and push exports, says the Economic Survey.

The Survey said as India looks to deepen its involvement in global value chains (GVCs), it needs to look at the successes and strategies of East Asian economies.

 Economic Survey 2023-24 updates

These economies have typically pursued two main strategies – reducing trade costs and facilitating foreign investment.

It added that India faces two choices to benefit from ‘China plus one’ strategy and that is either to integrate into China’s supply chain or promote FDI from China.

“Among these choices, focusing on FDI from China seems more promising for boosting India’s exports to the US, similar to how East Asian economies did in the past,” the Survey, tabled in Parliament by Nirmala Sitharaman on Monday, said.

Moreover, choosing FDI as a strategy to benefit from the China plus one approach appears more advantageous than relying on trade.

“This is because China is India’s top import partner, and the trade deficit with China has been growing. As the US and Europe shift their immediate sourcing away from China, it is more effective to have Chinese companies invest in India and then export the products to these markets rather than importing from China, adding minimal value, and then re-exporting them,” it added.

The survey explained how increased FDI inflows from China can help in increasing India’s global supply chain participation along with a push to exports.

At present, FDI from China in any sector needs government approval.

China stands at 22nd position with only 0.37% share ($2.5 billion) in total FDI equity inflow reported in India during April 2000 to March 2024.