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India's Marine Power & Blue Economy

The Blue Economy, with its untapped seabed minerals and renewable ocean energy, could prove that light at the end of the tunnel for Covid-19 afflicted India. The nation’s strategic location in the IOR and its potentials as a maritime power is a blessing for both the security of the region and the Indian economy.

Photo Credit : Indian navy

INDIA’S ROLE AS A MARITIME power is crucial as 90 per cent of trade by volume and over 74 per cent by value takes place via sea routes. More than 80 per cent of India’s energy supplies also arrive along these sea lanes. For many years, we argued that our development planning must be premised on our being a maritime economy. Still, our plans, investment and defence program have remained dominantly focused on our land-based resources. 

The Indian peninsula is ensconced by seas & oceans. The country’s location in the Indian Ocean, jutting out 1000 miles into it as it does, is of strategic advantage. The peninsula straddles some of the most critical sea lines of communication. A great deal of global trade travels along these routes. India’s two island territories, the Andaman and Nicobar islands, are of great strategic importance too. India has an Exclusive Economic Zone (EEZ) of over 2.3 million square kms and has deep seabed mining rights in the southern Indian Ocean region.

An active presence in the Indian Ocean Region (IOR) is necessary for India to be able to protect its vast 7,500 kilometre coastline. Simultaneously, the country needs to ensure open sea lines of communication. 

If India has to thrive and recover its growth momentum in the post Covid-19 world of ultra geo-economic activities, the country must trade with the world. Maritime Power and the Blue Economy could be a way out of the abyss the pandemic induced slowdown has hurled India into.

On Navy Day in 2019, Prime Minister Narendra Modi spoke of the Navy of the Chola kingdom of ancient India as one of the strongest navies of its era, accounting for the economic supremacy of the regime. India aspires to be a maritime power once again. The Indian Ocean Region is vital for India. As the legendary Admiral Alfred T. Mahan, had summed up succinctly, “Whoever attains maritime supremacy in the Indian Ocean, would be a prominent player on the international scene.”

“However, India cannot call itself a maritime power,” laments Commodore Anil Jai Singh, Vice President, Indian Maritime Foundation. “While the Indian Navy is the most powerful navy in the Indian Ocean and is amongst the top five navies in the world, the other elements of maritime power are lagging. India’s share of global shipbuilding is less than one per cent. And its 13 major and almost 200 non-major ports are not globally competitive and in need of modernisation,” says he.

India’s marine-based economy is way behind in terms of standard global practices and needs focus. As Commodore Jai Singh points out, “Its 200 million strong coastal community, which depends on the sea for a livelihood continues with archaic practices of fishing etc. The potential of the island territories remain untapped. Seabed exploration for mineral and other resources has barely begun.”

These pertinent issues about the country’s maritime power and Blue Economy need top priority now. An infinite swathe of the Indian Ocean Region (IOR) is India’s responsibility and maritime power and a Blue Economy can be a possibility with the right allies and through strategic international outreach. Beyond the IOR, $3 trillion worth of trade passes through the South China Sea, over which China attempts to keep a hold.

Importance of the Indian-ocean-trade, security & norms (Credit Laxman Kadirganar Institute)The concept of the ‘Blue Economy’ is spreading fast through the globe and aims at transforming the world’s economy, habits and the planet itself during the 21st century. A Blue Economy is about oceans, seas and the resources they hold.

India’s Blue Economy

In the Indian context, a Blue Economy would be the sum total of economic activities involving marine resources. Fisheries, deep sea mining and offshore oil and gas make up a large part of India’s Blue Economy.

It is necessary for India to tap into the enormous potential of the ocean-based resources, which could propel the nation into a higher growth trajectory. The development of the Blue Economy can serve as a growth catalyst in realising the vision to become a $10 trillion economy by 2032. Most of the country’s oil and gas is imported through sea routes, a dependence that is expected to rise exponentially by the year 2025.

Of the 2.3 million square kilometres available to India in the EEZ, 1.5 million has been explored across both the Bay of Bengal and the Arabian Sea. India has filed a claim in 2009 to raise its approved claim of 200 nautical miles to 250 nautical miles – the maximum permissible limit.

Chief of Naval Staff (CNS)Admiral Karambir Singh

In 2010 the Indian government released a 10-year maritime agenda (2010-2020) with ambitious plans to develop the maritime sector. Thereafter, the present government in its first term initiated Sagarmala, a multi-crore programme aimed at revitalising India’s ports and maritime infrastructure, including inland marine transportation and coastal shipping. The Sagarmala Programme has identified over 600 projects, entailing an investment of around Rs 8 lakh crore ($120 billion) by 2020. This will save the country nearly $6 billion per annum in logistics costs, besides creating 10 million new jobs and boosting port capacity by 800 million metric tonne per annum (MMTPA) to an overall 3,500 MMTP.

Yet, halfway through 2020, there is no mention of the 10-year maritime agenda. The ambitious Sagarmala programme is also not progressing at an ideal pace. As Commodore Anil Jai Singh points out, “One of the problems in India is the multitude of departments and ministries linked with the maritime sector with no central empowered authority to synergise or even coordinate their activities. This has been highlighted many times in the context of maritime security, but has found little resonance with the government.” This special focus area was recognised at the 14th Indian Ocean Rim Association (IORA) Ministerial Meeting in Perth, Australia, on 9 October 2014.

As an economic model the Blue Economy comprises:

  •  Fisheries and Aquaculture
  •  Renewable Ocean Energy
  •  Seaports and Shipping
  •  Offshore Hydrocarbons and Seabed Minerals
  •  Marine Biotechnology, Research and Development
  •  Tourism

Indo-Pacific & the QUAD

India’s Blue Economy is poised for growth. According to the IORA charter, while the region is not yet a hub of Global Value Chains (GVC) oriented trade and investment – the kind that has driven East Asian industrial success in the past four decades – trade in parts and components is increasing. This is currently concentrated among Southeast Asian IORA members, and in a few sectors, notably electrical machinery with $231.4 billion of exports, road vehicles ($77.1 billion of exports), office machines ($64.5 billion), and telecommunication equipment ($31.8 billion). The charter says cooperation among the IORA members could result in greater intra-regional services trade. Weak regional institutions and formal legal structures to effectively support regional trade and investment-related cooperation that create tariff and non-tariff barriers, prove a problem, however.

In November 2017, India, the US, Japan and Australia formed the “Quad” coalition to build up a cohesive strategy to keep critical sea routes in the Indo-Pacific free and open under the international maritime code of conduct. And in 2018, the United States’ National Defense Strategy (NDS) prioritised the Indo Pacific command. Initially, India was slow to respond, but the developments in Ladakh and the South China Sea have necessitated the urgency of the alliance. These developments have necessitated both immediate response and long term perspective planning to counter similar designs by China in future.

The India-Australia Virtual Leaders’ Summit between Prime Minister Scott Morrison and Prime Minister Modi held on 4 June was a breakthrough, elevating Comprehensive and Strategic Partnership, especially in defence and security. Australian Minister for Defence, Senator Linda Reynolds (see interview) told this correspondent, “I am also open to exploring the possibility of trilateral cooperation with India and other countries in our region, including Indonesia.”

Though relatively late to start, the India-Australia Mutual Logistics Support Agreement (MLSA) has finally been signed. Since 2015 cooperation between the two nations had been confined to the bilateral naval exercise, AUSINDEX. Will it gather momentum by including Australia into the Malabar naval exercise? Defence Minister Linda Reynolds said, “It will also enable greater crossservice military activity, building from the success of our most complex exercise to date, AUSINDEX 2019, which focused on anti-submarine warfare. More than half of Australia’s global trade – including oil – crosses the Indian Ocean.” 

India is now considering Australia’s interest in being part of the Malabar exercise which will be the bedrock of India’s international collaboration. For the United States too, the Indo-Pacific Strategy has already assumed utmost prominence. It is well defined as the region that spans from the Pacific Ocean to the Indian subcontinent.

"The American people and the whole world have a stake in the Indo-Pacific’s peace and prosperity,” US Secretary of State, Mike Pompeo said in 2018 when he set the initiative in motion. It is the reason why the Indo-Pacific must be free and open. No country invests more in the Indo-Pacific than the United States, which had $940 billion in foreign direct investment fueling growth in the region as of 2018, he had pointed out.

India’s Marine Muscle &Shrinking budget 

Marine power has the true potential to augment India’s economic strength. So far that is not the case, however, as speed is missing in enhancing India’s marine power. On Navy Day, the Chief of the Indian Navy, Admiral Karambir Singh, raised the red flag on the dwindling Navy budget. The budget, which was increased by 18 per cent in 2012, has been raised by a paltry 13 per cent in 2019-20. Though predominantly a Maritime Nation, among the three forces, the Indian Navy gets the lowest share of the defence budget. 

While the Indian navy has long articulated a need for 20% share of the defence budget, in 2019-2020 Government allocated 23,156 crore, landing a big blow to its ambitious plan to be among the best in the world. Budgetary constraints hamper the critical modernization plan of the Indian Navy.

Despite such constraints, Indian navy has been ahead of the curve as far as indigenization is concerned. The thrust on indigenisation has led to 88 per cent orders for Indian vendors and shipyards, however, and 50 ships and submarines are currently under construction. On India’s security strategy in the Indo-Pacific region, Admiral Singh said the Indian Navy was ready to work with like minded nations based on common interests to ensure safe and secure seas and to promote a rules-based order.

IAC Vikrant at Cochin Shipyard

Even as Lieutenant General-level dialogues are taking place between Indian and Chinese armies in an effort to resolve the month-long standoff in eastern Ladakh, the Indian Navy has been reporting Chinese naval presence closer home in the Indian Ocean Region. According to a former Rear Admiral of the Indian Navy, “Within the IOR region, the Chinese interests are far greater than a mere border dispute.’’ The South China Sea is already wellknown as disputed waters, with China always on an aggressive stance.

Large traffic of Chinese ships and submarines have been recently reported by the Indian Navy in the ocean from the Malacca Straits to the Gulf of Aden to the Red Sea. These submarines were both conventional and nuclear types, which are obviously covert activities. China has, moreover, been sending off Unmanned Underwater Vehicles (UUV) in the IOR and has completed 3,400 observations lately. 

String of PearlsLast year, India exercised its composite combat capability through the Navy’s largest biennial war game, Theatre Level Operational Readiness Exercise (TROPEX-19),  Admiral said. The Indian Navy has also upped the operational dimensions with Friendly Foreign Countries(FFCs). “From a conservative figure of eight exercises in 2015, we are now participating in close to 30 bilateral/multilateral exercises,” he said. In addition, under the Government of India’s overall ambit of ‘Neighbourhood First’ policy, the Navy also undertook Joint EEZ patrols of Maldives, Seychelles and Mauritius as well as Coordinated Patrols (CORPATs) with Bangladesh, Myanmar, Thailand and Indonesia," CNS highlighted. ( See below the Photo Indian Ocean)

As per Maritime Capability Perspective Plan, the Indian Navy initially planned to have 200 warships, 500 aircraft and 24 attack submarines where the warships were cut to 175. At present, the Navy has around 132 ships, 220 aircraft and 15 submarines. Currently, the Indian Navy has only one aircraft carrier, INS Vikramaditya & we require at least three aircraft carriers. Gaps are widening as some of the key projects turn tardy. The Project 75I (6 new diesel-electric submarines) is still scouting for foreign partner and the  induction of the indigenously built Scorpene class continues after years of delay. A visible threat warrants a comparison and a closer look at China from the naval perspective. China’s People Liberation Army Navy (PLAN) currently has some 400 naval ships and gearing up for 100 submarine by 2030. A veteran navy Cmde Anil looks at the critical capability gaps points out: 

“Carrier capability is being compromised, the undersea warfare dimension is in need of immediate attention, the naval air arm is deficient in numbers, expeditionary capability has had a setback with the delay in the LPD programme, and mines counter measure capability is virtually non-existent.” 

While he also points out the clear and present dangers in the prevailing security environment said: “This is compounded by the fact that all navies in the region are augmenting their naval forces, with our major adversaries on overdrive in their naval expansion.”

Notwithstanding its budgetary constraints, the Indian Navy is deemed to be the seventh most powerful navy in the world. India has an opportunity to harness its marine power and supporting the region for its Blue Economy initiatives. It is a net security provider in the IOR and the pillar that could propel India into a maritime power.

Australian Defence Minister Linda Reynolds ( credit-Australian Department of Defence)