India is positioning itself to play a bigger role in the global maritime diplomacy domain.
As part of the country’s larger focus on the ‘blue economy’ — namely harnessing the multiplier effect of ocean-going trade on the economy — the Ministry of Ports, Shipping and Waterways (MoPSW) is setting up the India Maritime Centre (IMC), alongside an international arbitration centre, and propelling shipbuilding activities. International diplomacy forms yet another crucial part of the strategy.
Efforts in this direction include connecting the Indian Ocean with the Mediterranean through the India-Middle East-Europe-Economic Corridor or opening up trade and economic opportunities for the land-locked countries of Central Asia through the International North-South Transport Corridor.
“Under the Act East and Neighbourhood First policy, India is leading the regional transport integration efforts, particularly with its BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) partners,” says Sarbananda Sonowal, Minister for Ports, Shipping and Waterways.
Unified platform
The IMC aims to promote collaboration, policy advocacy, and sustainable growth, and serve as a unified platform for the maritime industry.
Sonowal explains that on the domestic front, the IMC will unify diverse stakeholders, including shipyards, shipping lines, ports, and trade associations, to enable greater coordination and efficiency in the industry. As a ‘think tank’, it will provide expert analysis and recommendations to the government to drive sustainable growth.
Based in Mumbai, the IMC will enhance maritime infrastructure while creating a ‘fund’ for startups.
“On an international scale, the IMC will be positioned to elevate India’s role and influence within the International Maritime Organization (IMO) and other global maritime forums. This will help build robust relationships with key stakeholders,” Sonowal says.
“IMC will play a crucial role in advancing India’s maritime diplomacy and shaping the future of the maritime sector,” the Minister emphasises.
“There has long been a gap between India’s maritime needs and the global policymaking at IMO. Over the past decade, India has taken an active interest in international maritime affairs, and the IMC should function like think-tanks do in international relations,” a foreign affairs commentator said.
Arbitration centre
The Delhi-based India International Arbitration Centre (IIAC), aimed at facilitating the ‘ease of doing business’ in India, has been designated as an institution of national importance. In September, the IIAC signed a memorandum of understanding with the shipping ministry to launch the India International Maritime Dispute Resolution Centre (IIMDRC), a branch of IIAC, in Mumbai.
While India has several arbitration centres, including the IIAC, Delhi International Arbitration Centre, and Gujarat Maritime Arbitration Centre, none focus specifically on maritime disputes. The IIMDRC aims to fill this gap.
It can “position India as a significant hub for maritime arbitration”, explains a ministry official.
“Given India’s substantial share in international maritime trade, there is immense potential to develop a robust maritime arbitration framework, capable of effectively handling disputes arising from ports, shipping, waterways, and logistics,” says Sonowal, pitching the IIMDRC as a dedicated centre for maritime dispute resolution on the lines of the London Maritime Arbitrators Association (LMAA) or the Tokyo Maritime Arbitration Commission (TOMAC).
According to a neutral commentator, the IIMDRC is India’s attempt to enter an elite club dominated by the West.
Another ministry official points out that international stakeholders may initially be sceptical about the new center’s efficiency and impartiality. “To overcome these challenges, the IIMDRC will need to demonstrate consistent performance, adhere to international standards, and develop a robust network of maritime experts and arbitrators,” the official adds.
Shipbuilding prowess
The ultimate driver of influence in maritime trade diplomacy, however, will be growth in shipbuilding activity and shipping lines that compete on a global scale.
There has been a 22 per cent increase in the number of Indian-flagged ships to 1,526 between 2014-15 and 2023-24. And in 2023-24, India built ships with 26,412 gross tonnage (GT), recording a 19 per cent annual growth. Yet this is not nearly enough, according to industry experts.
Minister Sonowal acknowledges this challenge. Projects like the international ship repair facility and the world’s first stepped dry-dock in Cochin Port are aimed at enhancing India’s maritime capability. Shipbuilding and ship repair clusters are slated to come up in five states — Gujarat, Maharashtra, Kerala, Andhra Pradesh and Odisha.
“An updated Shipbuilding Financial Assistance Policy (SBFAP 2.0), with special incentives for green ships, is under discussion. Also under consideration is funding of common maritime assets and test facilities for the shipbuilding sector, and incentivising industry players to establish shipbuilding facilities, ancillary units and support container manufacturing in the country in collaboration with coastal states,” the Minister says, adding that a ₹25,000 crore maritime development fund is being set up to provide low-cost financing.
A shipping services company is also being planned under the fund.