Shipbuilding is a highly cyclical industry. Post-World War II, output expanded but remained volatile, with a decline in the 1970-80s followed by recovery in the 1990s. By the early 2000s, production had shifted to East Asia, with China, South Korea, and Japan accounting for 85-90 per cent of global output (measured in gross tonnage), driven by technological efficiency and reduced build times. A significant advantage that technology brought in was the choice of power and the speed for the type of trade route preferred by the shipowner.

During World War II, the United States achieved unprecedented industrial mobilisation, producing over 2,600 Liberty ships and rapidly reducing build times through assembly-line methods from over 200 to around 40 days. Post-war, despite subsidies covering 30-50 per cent of costs, US commercial shipbuilding declined sharply from the 1970s.

Following World War II, Japan rebuilt its merchant fleet-initially relying heavily on foreign-built ships, which carried 70-75 per cent of its trade-through a state-led shipbuilding programme begun in 1947. Annual targets, set by the government, guided production and allocation. Backed by significant finance, including 31.5 per cent of Japan Development Bank loans (1951-72), and supported by technological modernisation, quality control, and industry coordination, Japan's shipyards achieved cost efficiency, reliable delivery, and strong global competitiveness.

While these transformations unfolded, India missed the boat. Presently, India's share in global shipbuilding remains below 1 per cent, despite having a long coastlines and growing trade. Key constraints include weak strategic foresight, slow adoption of modern production technologies, and the absence of robust financing models across shipbuilding and its ancillary ecosystem. Indian shipyards have historically faced higher cost of capital (often 10-12 per cent compared to 2-5 per cent in East Asia), significantly affecting competitiveness in a capital-intensive industry.

Shipbuilding trends globally reflect a close relationship between trade expansion and domestic industrial capacity. India, however, has not translated its trade growth into shipbuilding strength, with output remaining negligible relative to Asian peers (Figure 1).

Indian skillscape and issues

India's skilling ecosystem has expanded significantly, with millions trained under programmes such as the Skill India Mission, Pradhan Mantri Kaushal Vikas Yojana (PMKVY), and apprenticeship schemes. The Skill India Mission has logged about 2.27 crore individuals trained, while the PMKVY indicates over 1.6 crore youth trained since 2015. The major performance index of these lies not in the imparted skill-numbers but in the numbers employed post training.

An analytical reports of one flagship skilling programme (PMKVY), reflects a low placement record with-18.4 per cent (PMKVY Edition 1.0), -23.4 per cent (Ed. 2.0) and -10.1 per cent (Ed. 3.0). One independent analysis of the official data shows that of the 12.45 million candidates who were assessed, only about 2.45 million were placed (actual placement rate ≈ 22 per cent).

Employability outcomes remain uneven, with Periodic Labour Force Survey (PLFS) data showing modest and inconsistent wage gains from vocational training. Furthermore, the Apprenticeship Promotion Scheme has increased industry participation, but adoption remains uneven, particularly among large firms.

Other shadow indicators are the limited recognition for certified skills in the market, little palpable improvement in the quality of life and poor/inconsistent training quality. On the other end of the spectrum is the attrition of the flight of skilled workforce to more lucrative foreign markets.

According to the PLFS, unemployment among educated youth remains significantly higher than the national average, indicating persistent skill mismatches. And skilling is yet to gain a preferred first-choice career pathway for most young Indians. A degree and a desk job still holds the sway.

A glance at global skilling

Only about 4-5 per cent of India's workforce has formal vocational training, compared to far higher participation in advanced economies. Vocational enrolment exceeds 50-90 per cent in countries such as Japan, South Korea, Austria and Netherlands, supported by stronger institutional frameworks and industry integration.

In many countries, vocational education accounts for~2 per cent of the education budget. In China and Germany, it is around 11 per cent. In India, comprehensive spending data is not publicly available due to fragmented skilling programmes across multiple ministries.

Maritime skilling

India is a major supplier of seafarers globally, with over 2.5 lakh active seafarers. India with its strong school education, communication adeptness and with a bend of problem solving nature etc., still commands a good position in terms of officers for seafaring careers. However, at the support level, Indian crews find lesser takers. This can be mainly attributed to the fact that many nations (maritime and otherwise) prepare their native workforce with comparative ease for skills required at this level.

Looking at our own shores and shore-based careers, Sagarmala Programme gave the much-needed coastal community development component focusing on skill training. The Sagarmala DDU-GKY Convergence Programme had conducted gap studies in 21 coastal districts. Port centred Multi-Skill Development Centres, Skill Hubs are few initiatives with sectoral focus. The most recent, ?69,725-crore package (2025) aims to boost shipbuilding capacity and technological capabilities India's shipbuilding ambitions are also reflected in a series of upcoming greenfield and brownfield shipyard developments across the coastline. The upcoming shipyards include Tuna Tekra (Gujarat), the National greenfield shipbuilding cluster between Dighi/Jaigad/Vijaydurg/Bankot (Maharashtra), Thoothukudi (Tamilnadu), Kendrapara (Orissa); and Duggarajapatnam (Andhra Pradesh), to mention the ones in focus. These emerging hubs signal a significant expansion of domestic shipbuilding capacity.

Shipbuilding is inherently labour-intensive, generating an estimated 6-8 direct jobs per ?1 crore of investment, with significant multiplier effects across ancillary industries. A modern shipyard ecosystem requires a wide spectrum of 30-40 distinct trades, ranging from welders, fabricators, and pipefitters to marine electricians and naval architects. This diversity and scale of skill demand make maritime skilling a strategically important component of industrial development.

Skilling the maritime sector for shipbuilding: Lessons to learn

Firstly, a status and need analysis is needed. Notwithstanding the macroeconomic questions of who wants to build ships, the types and the range of costs, needs of the nation must be taken as the base data starting point. The need to build tankers, container ships and the like on the merchant shipping side and the defence builds on the other side will be the driving factors. Three broad sets of information become imperative: status of resources for training (equipment in yards and training centres), status of requirements at all trade-levels (trades relevant to shipbuilding; welders, fitters, electricians, riggers etc.), status of skilled workforce being trained and skilled numbers available for upskilling into the sectoral shipbuilding segment (e.g., ITIs and similar institutions) and the attrition. Also, the consequential data on the availability of trainers needs to be brought into focus.

Secondly, the budget allocations. This must include resources to modernise the field (yards, training facilities), training the trainer and supporting the trainee. The execution of this becomes crucial. For example, under the internship programme announced in the Union Budget FY 2026, only about 5 per cent of the allocated funds were spent. Also the Comptroller and Auditor General of India (CAG) audit of PMKVY (2025) reported had reported financial irregularities, delays in financial reporting, unclear accountability in utilisation of disbursed funds etc. Though these are regular, guessable observations, it needs good endeavour to not fall into these pits.

Thirdly, bringing up the training infrastructure both in materials and in curriculum. The infrastructure must be brought up by collaborating with willing foreign partners. The Korean interest to support and initiatives to establish Shipbuilding Training Centre in Indian Maritime University (IMU) must be given traction. The curriculum must fit well into the universal needs and standards must be ensured. A standard certification equating with the NSQF through IMU will facilitate the aspiring upskilled youth to find employment anywhere in the country's shipyards (about 30-50 as of now).

Fourthly, a sustainable model for feeding into the skilling/upskilling conveyor must be put in place. State Skill Development Corporations/bodies must come forward to select and support aspirants with scholarships etc. (Such models are in existence but needs and better spread).

Fifthly, the industry confidence in the model has to be secured. In the current ambience, employers rarely use public skilling certifications as hiring benchmarks; most rely on internal training systems and referrals (shipyards are typical examples). Industry participation in curriculum design, certification standards and assessment processes at scale need to be institutionalised and IMU can play a significant part.

Further, the institutional fragmentation in the skilling ecosystem such as training delivered by one agency but assessment conducted by another, certification is by Sector Skill Councils (SSCs) but placements are handled by separate partners etc., must be ironed out. India's skilling ecosystem spans over 20 ministries and multiple agencies, leading to fragmentation and duplication.

The system diffuses responsibility without clear accountability for outcomes. Employer surveys indicate that SSC certifications carry limited signalling value, compared to academic degrees or prior work experience. Although SSCs were intended to align skills with industry demand, in practice they have largely focused on developing standards rather than ensuring training and employment outcomes.

The inherent nature of maritime sector is to align with international standards and stay well regulated. In spirit, if the shipbuilding skill model can be made to work with the trifecta jigsaw of Government (Ministry)-Academia (e.g., IMU) and the industry (Shipyards), it can become a model worth adoption by other sectors.

Other measures to skill better

Expanding NAPS and embedding training directly within workplaces to improve job readiness at scale.

Initiatives like PM-SETU, the central scheme for modernisation of ITIs, point towards stronger execution models where industry ownership and accountability are built into programme design.

Financial support through skill loans will give the students more choices, improved quality of institutions and promote demand-driven skill development.

Use of skill vouchers is another trainee-based skills financial idea. It allows flexibility and choices for students. It incentivises delivery and outcomes. It will drive quality and accountability. Singapore and Croatia have implemented them.

Skill levies was another alternative financial model (Latin American countries, Germany, Singapore, South Africa and South Korea) worth experimenting with. It ensures industry ownership of skills and creates stable funding insulated from political and budgetary cycles.

Without aligning financing, skilling, and industrial policy, India risks remaining a marginal player in global shipbuilding despite favourable demand conditions.

The proverb goes: 'If the ship does not come in, swim out to it' For India, shipbuilding is starting to come in. Now it requires for us to swim towards it.

Source: ET Infra. Com 

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