Indian shipping and ship-repair industry has an opportunity worth over Rs200bn ($3.3bn) as 41% of the country’s fleet is more than 20 years old, according to an analysis ‘Indian Shipping Fleet: Size, Capacity and Age Composition’, conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

The analysis found that there are a total of 1,122 shipping vessels in the country and 466 (41%) of them have been operating for 20 years and more.

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Considering that the average life of a vessel is 26 years and based on the rate at which India’s vessel strength grew during 2000 and 2011, ASSOCHAM found that around 33 ships (7%) of the 41% vessels need to be replaced.

If a vessel takes an average of $100m to construct, then to replace 33 ships it would cost around $3.3bn, estimates the apex industry body.

“The government needs to act as a facilitator and create opportunities for a healthy business climate to attract fresh investments in the shipping sector.”

ASSOCHAM secetary general DS Rawat said majority of Indian ships are less competitive as mostly younger vessels that are less than 15 years old are preferred in international trade.

“The government needs to act as a facilitator and create opportunities for a healthy business climate to attract fresh investments in the shipping sector,” Rawat said.

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“As such the domestic shipbuilders need to pull up their socks and invest in capacity enhancement in order to take advantage of this opportunity or else shipbuilders from other countries will cash in on this opportunity.”

ASSOCHAM’s analysis also found that 264 vessels (23%) of India’s total fleet fall under the age group of five years, 141 vessels in 16-20 years, 135 vessels in 11-15 years and 116 vessels in six to ten years group.

According to the industry body, India accounts for around 1% of the global shipbuilding industry, which is dominated by China, South Korea and Japan.

The Indian Government needs to improve its ports by adding new infrastructure, enhancing the handling capacity and facilitating operation of larger shipments, to increase the country’s share in the global maritime industry.