Mazagon’s Agreement With US Could Be Game Changer For Indian Shipbuilders
Mazagon Dock signed a big agreement with the US government on Thursday, signalling a shift in the Indian shipbuilding and defence industries.
Mazagon Dock signed an MSRA with the US Government's NAVSUP Fleet Logistics Center (FLC) Yokosuka ahead of US President Joe Biden's visit to India for the G20 Summit and bilateral meeting with Prime Minister Narendra Modi on Friday.
After Larsen & Toubro, the Mumbai-based company became the second to sign MSRA.
The arrangement is likely to open up voyage repairs of US Navy ships at the country's Mazagon Docks yards, making it a major changer in the development of the Indian shipbuilding industry.
India's extensive coastline, the government's emphasis on Make in India, particularly in the defence and shipbuilding industries and China's global geopolitical shift are all contributing elements that are proving to be game changers in the country.
“Everyone wants to get out of China, and India, with its vast coastline, is strategically well placed to meet global shipbuilding demand,” said AK Prabhakar, head of research at IDBI Capital.
According to Deven Choksey of KR Choksey Securities, there is great potential for growth in the country's maritime business because India's defence expenditure is minuscule in comparison to the rest of the world's defence budgets.
“I think there is huge upscaling potential that is possible, and I have always believed that Indian shipbuilding and maintenance companies have got a phenomenal amount of potential and until now they were languishing. Now with the opening of this sector with government's active intervention it can be considered as a gamechanger and this could be considered as the beginning of new opportunities,” Choksey said.
He however cautioned that bureaucratic roadblocks could hinder the development in this sector.
“Only reason the only one will have to be a little careful is that the government companies normally do not take these opportunities big time in their favour and the fact that people keep coming, going and changing every now and then and if that is taken care of in my viewpoint, I think this is a big opportunity for India,” Choksey said.
