Among the more audacious foreign policy documents agreed to by an Indian Prime Minister in recent years, the India-United States “Joint Vision Statement on Asia-Pacific and the Indian Ocean Region” has come in a certain context. The reference here is not just to the Chinese advance in the Indian Ocean, but to the fervent efforts of two successive Prime Ministers, Manmohan Singh and now Narendra Modi, to awaken India to its maritime potential and responsibilities.
For Dr Singh, the lesson was derived from his intellectual understanding of India’s economy and transoceanic engagement. For Mr Modi, the derivation is more instinctual, coming as he does from a coastal state, Gujarat, with a long tradition of sea-faring traders. His thrust, as that of Dr Singh before him, is ranged against the continentalism of strategic thinking in New Delhi, which would rather obsess with the regions to India’s west and see India as the base of the Eurasian heartland and of Central Asia. In such a framework, it is difficult to conceptualise India as sitting at the top of Southeast Asia and the waters of the Indian Ocean system.
Over 90 per cent of India’s international trade (by volume) is dependent on the sea. Yet, the 1,100 odd merchant ships that bear the Indian flag make up only two per cent of global capacity and carry a mere 10 per cent of India’s global trade. In contrast, seven per cent of all Merchant Navy workers, anywhere in the world, are Indian. The sea is critical to India’s military and economic security. A revival in shipbuilding, historically an Indian comparative advantage, will have implications for both cargo vessels as well as the Navy.
There was a time when Bombay Docks and the shipbuilding prowess of the Wadia family had made India a leader in ship making. HMS Trincomalee, the oldest extant warship of the Royal Navy — to be fair it is a sailing frigate, going back to the 19th century, and has more heritage value than utility — was built in Bombay Docks. Today, all that is the stuff of trivia and little else.
Building ships in India is a healthy aspiration and integral to the “Make in India” mission. Yet, it cannot be done without policy overhaul, infrastructure upgrade and international collaboration. For example, 41 naval ships are at various stages of building or design in Indian shipyards. This comprises the Navy’s entire order book and includes the proposed aircraft carrier INS Vishal, to be built in Kochi using Indian steel. Having said that, without an arrangement with the US that allows integration of American technology, this aircraft carrier will not be the big leap the Indian Navy needs.
It is the same with commercial ships, including the LNG super-tankers for which India wants to partner South Korean companies. While the latter hold best-in-class intellectual property in this regard, they will be wary of committing to a big construction project in an India that does not have adequate shipyards. That apart, the frustrating experience of Posco, the South Korean giant that is still trying to set up a steel facility in Orissa, has travelled far and wide: to India’s detriment.
Capacity and policy are a function of ambition. Here too India has underplayed, undersold and undermined its sea-linked possibilities. Take fishing. Despite such remarkable access to the deep sea, 90 per cent of India’s fishing is in coastal waters. Indian fishing companies have neither the gumption nor the investment to go further and grow their businesses. They are happier picking small fry, literally and otherwise. This has ecological consequences in that it severely affects coastal fish populations.
There is also the question of provoking the neighbourhood. The fishing war with Sri Lanka is not really about small Indian fishermen accidentally straying into Sri Lankan waters. That may be the popular mythology and suit nationalist perception in Tamil Nadu and India. The fact is Indian fishing companies frequently use trawlers and sophisticated equipment to hijack waters from relatively modest Sri Lankan fishermen. Once more the vast seas that surround India, and the prospect of deep-sea fishing, is not explored.
Finally, there are the blunders of India’s cabotage policy. As per the Merchant Shipping Act, 1958, only ships bearing the Indian flag can carry cargo from one Indian port to another. Meant to boost domestic shipping companies, this protectionist policy has had quite a different impact. It has actually deterred investment in Indian shipping and enriched ports in other countries.
If an American or Norwegian ship carrying cargo for Mumbai port and as well as Kochi port comes to India, it cannot carry cargo or travel between Mumbai and Kochi. It must then unload the cargo for Kochi in Mumbai — and find an Indian ship to do the domestic leg, from Mumbai to Kochi. This has had two results. First, foreign ships simply bypass India and go to ports like Colombo, from where they do multiple trips to India to Mumbai and back to Colombo and then to Kochi, for example. This is expensive and inefficient. It also gives business to Colombo 90 per cent of cargo coming into or exiting the port there is India related that should have come to an Indian port and city. In the past five years, Colombo port has gone through a massive expansion, including with Chinese support, largely to continue to exploit India’s cabotage policy.
Second, Indian coastal shipping companies are happy to service big international ships and carry cargo from one Indian port to the next. They do not have the competition or the incentive to want to incorporate large ocean-worthy ships. They are content with second-class vessels that sail in fairly shallow waters, live off a bad policy and survive on lobbying. Not surprisingly, politics creeps in. A leading Maharashtra politician and his family have interests in coastal shipping and are significant beneficiaries of this short-sighted cabotage policy.
The Modi-Obama vision statement on the Indian Ocean cannot reach a satisfactory conclusion without India acting on the deficiencies and distortions referred to above. The sea is vital for India, but the flag and trade need to sail in unison. Without ambitious sea commerce, there is little point in dreaming of a strong Navy.
The writer can be contacted at malikashok@gmail.com
