India Looks at $2.2bn GDP, through Global Ship Recycling Business
BY Tiya Chatterji December 27, 2019
Owing to ratification of the new legislation, India eyes to garner at least 60 per cent of the global ship recycling business and emerge as a prime centre for recycling warships and other ships, according to Union Minister Mansukh Mandaviya.
At present, India recycles around 300 of the 1,000 ships which are demolished per annum globally. However, countries like Japan, Europe and the US were not sending their ships for recycling to India in the absence of ratification of a global convention. That scenario is set to alter with the Recycling of Ships Act, 2019. The Act ratifies the Hong Kong convention while facilitating the environment-friendly recycling process of ships and adequate safety of the yard workers.
The Shipping Ministry, also exuded confidence that benefaction from ship recycling activities to the country's GDP would reach $2.2 billion, almost double compared to the current level. According to Shri Mandaviya, Gujarat's Alang, the world's biggest shipyard, is ready to cater to projected increase in the number of ships for recycling.
"India, Bangladesh, China and Pakistan account for recycling about 90 per cent of the global ships. India's share at present stands at 30 per cent or 70 lakh gross tonnage of ships per annum which is bound to go to at least 60 per cent given 95 of the 131 plots at Alang (are) developing these as per Hong Kong conventions, paving way for ships from Europe, Japan, US and other countries to be recycled here," he noted.
Further, the minister said there are 53,000 merchant ships globally and out of them, 1,000 are recycled annually. Once more ships will start coming to India for demolition, the ship recycling contribution to the GDP will grow to USD 2.2 billion from present USD 1.3 billion.
Terming the Act as "a hallmark moment in the Indian maritime history", Mandaviya said it is part of ongoing major reforms and Prime Minister Narendra Modi government's commitment towards making India a $5 trillion economy.
The Act is expected to raise the brand value of ship recycling yards located at Alang in Gujarat, Mumbai Port, Kolkata Port and Azhikkal in Kerela and will also enhance availability of steel.