Union Budget 2021 | Ship Recycling capacity to double by 2024, generate 1.5 lakh jobs

Finance Minister Nirmala Sitharaman on Monday said ship recycling capacity will be doubled by 2024 and efforts are being made to bring more ships from Europe and Japan.

While presenting the Union Budget 2021-22 in Parliament, the Finance Minister said this, in turn, will generate 1.5 lakh jobs. “Efforts will be made to bring more ships to India from Europe and Japan. Recycling capacity of around 4.5 Million Light Displacement Tonne (LDT) will be doubled by 2024,” Sitharaman said.

India has enacted Recycling of Ships Act, 2019 and acceded to the Hong Kong International Convention. Sitharaman said post-enactment of the law, around 90 ship recycling yards at Alang in Gujarat have already achieved HKC-compliant certificates.

Ports, Shipping and Waterways Minister Mansukh Mandaviya has recently said that India aspires to grab at least 50% of the global ship recycling business. The country’s share in the ship recycling business is around 30% at present. Currently, India recycles 70 lakh gross tonnage of ships per annum while that of Bangladesh is 68 lakh gross tonnage. Pakistan recycles 37 lakh gross tonnage of ships and that of China is 34 lakh gross tonnage per year. “These four countries account for 90% of the ships recycled globally. Post enactment of the Recycle Act, India eyes 50% of the global share as many countries will be sending ships here after India ratified the global convention,” the minister had said.

According to Mr. Mandaviya, Gujarat’s Alang, the world’s biggest shipyard, is ready to cater to the projected increase in the number of ships for recycling.

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 change with the Recycling of Ships Act, 2019.

The Act ratifies the Hong Kong convention and facilitating environment-friendly recycling process of ships and adequate safety of the yard workers.

The minister had also 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’s contribution to the GDP will grow to $2.2 billion from present $1.3 billion.

India has 12 major ports — Deendayal (erstwhile Kandla), Mumbai, JNPT, Mormugao, New Mangalore, Cochin, Chennai, Kamarajar (earlier Ennore), V O Chidambaranar, Visakhapatnam, Paradip and Kolkata (including Haldia) under the control of the Centre. These major ports handle about 60% of the country’s total cargo traffic.