India's aim to achieve 5 Trillion Economy in the next few years and the role of the shipping industry towards this objective.

1. 5 Trillion Economy-
Role of Shipping Industry
- Capt Ashok Menon
FOSMA, Kolkata

3. US $ 5 trillion
= $ 5, 000,000,000,000
= INR 352.5 trillion

4. It appears a tall order, but the
question is not whether India will
become a 5 trillion economy, but
when we will do so. 5 trillion is a
given, but time frame is debatable.
In fact India is poised to become a
USD 10 trillion economy by 2035.

5. No matter at what rate our
economy grows, we will no doubt
reach the target in a few years
whether it be five years or a more
conservative seven years.

8. Private Investment and private
public participation is the key driver
of the economy.
- The target requires 8% growth rate
- Investment and exports have to
pick up
- Favourable conditions have to be
created by the Government so that
the growth rate can pick up

9. Inflation is a big obstacle to
reaching the target.. With a growing
economy there has to be a higher
production and increased demand.
Higher production leads to a higher
employment rate, further fuelling
demand.

10. Increased wages lead to higher
demand as consumers spend more
freely. This leads to higher GDP for the
country combined with high inflation.
No doubt it is a good sign for the
economy, but inflation always acts as
an impediment to growth.

11. Today there is a global recession
due to various reasons. This is no
doubt having a trickle effect on
India also.
The report card on the economy
says it all regarding the situation.

13. As seen the problem lies with
the available economic data,
which clearly show a slowing
down of the Indian Economy.
This throws all existing
prediction about the future
growth off track.

14. If India's real GDP grows as per the
predicted growth rate of around 8.0
per cent in rupee terms for the next
five years, it can hopefully cross the
$5 trillion mark by 2024. But will such
a growth rate be sustained in view of
the present scenario? That’s the catch

15. ROLE OF SHIPPING INDUSTRY
India had a fleet strength of 1,400
vessels with gross registered tonnage
(GRT) of 12.68 million in 2018, as
compared to fleet strength of 1,371
vessels with 12.35 million GRT last
year.

16. How India is building up the
Shipping Industry as a contributor
to the 5 trillion economy and based
on sustainable development.

20. Policy initiatives to boost the
shipping sector in $ 5 Trillion
economy:
1. SEZ and CEZ being developed
2. NMPD Initiatives
3. 100% FDI under automatic route
for ports n harbours
4. 10 year Tax Holiday
5. Sagarmala Project

21. The Government of India is planning
to build 14 Coastal Economic Zones
(CEZs) in the country to boost
manufacturing and jobs. In
November 2017, the first mega CEZ
at the Jawaharlal Nehru Port in
Maharashtra was cleared.

22. Coastal Employment Zones (CEZ) is an
important component of the Sagarmala
Programme aimed at port-led industrial
development of 14 business-
friendly Coastal Economic Zones (CEZ)
with the investment of ₹4,639,700
million (equivalent to ₹4.9 trillion,
US$70 billion or €63 billion in 2018),
centered around ports in India

24. The government has initiated NMDP
(National Maritime Development
Prog), an initiative to develop the
maritime sector; the planned outlay
is US$ 11.8 billion. Plans to create
port capacity of around 3,200 MMT
to handle the expected traffic of
about 2,500 MMT within 2020.

25. 276 projects to be taken up for
implementation. These projects were
namely construction/upgradation
of berths, deepening of channels,
rail/road connectivity projects,
upgradation/modernization schemes
and other related schemes
for creation of backup facilities.

26. Government of India has taken many
steps to expedite the early
completion of the project such as
enhanced delegation of financial
power to Major Ports, streamlining
security clearance procedure for
bidders in respect of PPP and
dredging projects,

27. Sl. No. Name of the
Port
PPP Projects
implemented
Under imp-
lementation
1. Kolkata 2 2
2. Paradip 6 4
3. Visakhapatnam 8 6
4. Kamarajar 3 4
5. Chennai 3 1
6. Tuticorin 4 8
7. Cochin 4 0
8. New Mngalore 2 0
9. Mormugao 2 0
10. Mumbai 0 3
11. JNPT 3 3
12. Kandla 8 3
Total 45 34

28. Initiatives in Ports Sector
$1.6 bn FDI in Ports Sector during April
2000 – March 2019
7X Growth in FDI during 2014-17 vis-a-
vis 2011-14
100% FDI in port sector, India allowed in
port and harbour's construction and
maintenance via the automatic route.

29. Automatic Route:
ForeignInvestment allowed under
the automatic route without prior
approval of the Government or the
Reserve Bank of India, in all
activities/ sectors as specified in the
Regulation 16 of FEMA 20 (R).

31. GOI has encouraged FDI in a big way
to help finance the shipping sector.
It has also facilitated a 10-year tax
holiday to enterprises that develop,
maintain and operate ports, inland
waterways and inland ports.

32. Indians in Merchant navy
India contributes almost 13% of
Officers and 15% of ratings to the
world seafaring community.
About 28,000 seafarers employed on
Indian Flag vessels
And more than 75,000 in foreign
flagged vessels

33. Indians in Merchant navy
Each one of these seafarers are
an asset to the Indian Economy,
and bring name, fame and wealth
to the country while discharging
their duties.

34. Government Initiatives
Some of the major initiatives taken by
the government to promote the ports
sector in India are as follows:
Net profit at major ports has increased
from Rs 1,150 crore (US$ 178.4 million)
in FY13 to Rs 3,413 crore (US$ 529.6
million) in FY18 while operating margin
increased from 23 per cent to 44 per
cent.

36. CABOTAGE LAWS
In May, the Indian Shipping Ministry changed
its cabotage rules so that foreign-flagged
ships would no longer be required to obtain
a specialised licence to perform cabotage
operations. Previously, these licences would
only be offered if there were no Indian ships
available to carry out the task.

37. Since May however, international shipping
companies have been able to move export
and import containers along the country’s
coasts.
Relaxing cabotage rules has been on India’s
agenda for a while, due to a number of
factors.

38. For one, economic growth has increased the
amount of cargo that needs to be moved, but
according to the government, the Indian
container vessel fleet isn’t big enough to do
the job.
Allowing foreign ships to pick up the slack
would therefore reduce logistics costs, as
well as congestion on the country’s railways
and roadways.

39. Nevertheless, Indian-registered shipping
companies say that the move to relax
cabotage laws only serves to reward private
ports in India, while domestic shippers are
left out in the cold.
Thus Indian ship owners have argued against
the idea that relaxing cabotage restrictions
will increase India’s attractiveness as a
transhipment hub.

40. NATION BUILDING THROUGH SHIP BUILDING
Ship Building projects logistics, spares and project
support ecosystems, OEMs, Ancillary equipment,
downstram industries, huge employment
opportunities and so on.
1. First ship building factory was at
Vishakhapatnam in 1941 – Hindustan Shipyard Ltd.
2. Kochi Dockyard built in collaboration with Japan
is the largest and most recent dockyard in the
country.

41. 3. Mazagaon Dockyard in Mumbai builds Naval
Ships
4. India has 6.8 million Registered Gross Tonnage
5. India is setting up a world class Centre of
Excellence in Maritime and Ship Building in
colloboration with Siemens and IRS at Vizag and
Mumbai. Siemens is contributing technology and
expertise and 87% of funding. The Centre is
designed for 10,000 students a year from across
the world.

42. 6. Indian Shipping Ministry is also developing
Cochin into a global ship repair hub, with
construction of new facilities, capable of
repairing upto 85 vessels in a year.
Thus Indian Shipping Industry is gearing upto
be one of the important contributors to the
economy in its target of achieving the goal of
becoming a $ 5 trillion economy.

43. Sustainable Growth
Visakhapatnam, Paradip, Kolkata,
New Mangalore and Kamarajar Ports
are in the advanced stages of
installing their respective solar
power projects.

44. Government of India is targeting to
make the country the first in the world
to operate all 12 major domestic
government ports on renewable energy.
The government plans to install almost
200 MW wind and solar power
generation capacity by 2019 at the
ports. The energy capacity could be
ramped up to 500 MW in future years.

48. In conclusion we can say that India
is on its path to achieve the target of
$ 5 trillion economy of India and the
shipping sector will contribute in a
big way to achieve this....

49. THANK YOU AND WISH ALL OF YOU
A MERRY CHRISTMAS AND A HAPPY
NEW YEAR 2020 IN ADVANCE !