Leapfrogging the Indian Blue Economy

Amitabh Kant, Pramit Dash, Piyush Prakash

The human civilization originated along the rivers and developed through centuries of trans-continental maritime trade. Oceans have always been a fundamental constituent of human evolution and are still the key to the planet and human well-being. Covering over twothirds of the earth, oceans have given our earth the name - Blue planet. The oceans help regulate the earth's climate by absorbing 25% of anthropogenic emissions of carbon dioxide, provide seafood and nutrition essential for more than a billion people while anchoring various forms of renewable energy simultaneously. The various actors and technologies associated and the economic value generated through the aforementioned activities and more constitute what we term as the Blue Economy.

 The concept of the Blue Economy was first introduced in 1994 by Professor Gunter Pauli at the United Nations to reflect on the business models of the future, incorporating challenges posed by climate change. However, it gained greater significance after the 3rd Earth Summit Conference - Rio+20 in 2012. The Blue Economy in general is built on some key building blocks that propel economic value creation, foster sustainable livelihoods and restore and maintain ocean ecosystem as discussed further.

I.                   Cultivation and Harvesting of Living Marine Resources

Seafood contributes over 15% to the animal protein consumed by the world population with more than 1 billion people relying on it. Fisheries and aquaculture are helping provide food and nutritional security among the poor living by the coast. It is also catering to the increasing high value seafood demand. Living marine life not only is a prime food and nutrition source but also a key ingredient in marine biotechnology that is driving the global Research and Development (R&D) for healthcare and allied industries. Fishing and allied activities provide employment to roughly 700 million people around the globe – with women being 15% of the workforce directly engaged in fisheries and up to 90% of the workforce in secondary activities.

II.                Extraction of Non-Living Marine Resources

The marine non-living resources may be categorized under several heads with the most well-known being hydrocarbons (oil and gas) and evaporites (common salt etc.) followed by polymetallic deposits and others. Oil and gas remain a major source for fulfilling the global energy demand and hence offshore deep-sea oil and gas extraction form the biggest sub-sector. The demand for minerals and sand is expected to propel sea-bed mining on a large scale. The scarcity of fresh water is prompting the world to look at desalination as a means to provide drinking water to the coastal habitations and the exponential growth of global desalination capacity is expected to continue further.

III.             Ocean Renewable Energy

The climate change and consequent demand for alternative sources of energy is propelling the world towards development and adoption of renewable energy. Ocean forms one of the largest and yet least explored renewable energy sources on earth. With various forms of ocean energy – tidal streams, ocean currents and wind by the coast – it has the potential to provide a substantial amount of renewable and reliable energy around the globe. Ocean energy can be harvested in all countries with access to sea and oceans and is far more predictable creating a reliable energy generation system.

IV.             Maritime Transport and Trade

Shipping is the primary means of inter-continental trade – carrying raw materials, finished consumer goods and energy. Currently, around 90% of the global trade is carried on the ocean, and by 2050 maritime freight transport is projected to quadruple from the 2010 levels. The shipbuilding industry is also witnessing a steady growth and providing real added value to coastal communities. Shipping is not only facilitating world trade but also contributing to economic growth and employment – both at sea and on land. In addition, submarine cables cross the ocean’s floor to carry 90 % of the electronic traffic on which communication systems rely and, thus, are of profound importance in this information age.

V.                Tourism and Recreation

Global travel and tourism contributed greater than 10% to the world GDP (before the COVID pandemic set-in) and is expected to grow at around 4% annually – with bulk of the growth coming from coastal and marine tourism. It is particularly important in the context of island nations where tourism constitutes around 40% or more to the GDP. Tourism, in addition to providing direct and indirect employment, also helps promote local products and industries. With marine ecosystem particularly vulnerable to over exploitation and climate change, sustainable tourism is gaining traction helping in the conservation of the ecosystem.

VI.             Carbon Sequestration and Coastal Protection

Oceans constitute a major sink for anthropogenic emissions - absorbing 25% of the extra carbon dioxide added to the earth's atmosphere by burning of fossil fuels. Carbon sinks like mangrove forests, sea grass beds, and other vegetated ocean habitats are up to five times as effective as tropical forests at sequestering carbon. Coastal ecosystems such as coral reefs help protect communities and cities from storm surge and wave damage. The need for upkeep and restoration of such habitats is expected to grow in the near future and is imperative to enhancing the long-term health and resilience of the planet.

International and National Focus on Blue Economy

Understandably so, across the world – especially in the OECD countries and island nations – the Blue Economy is being given special emphasis with various initiatives being undertaken to harness its potential. Countries like the USA, UK, Australia and Norway have developed dedicated ocean policies with measurable outcomes and budgetary provisions and have established institutions at central and state levels to ensure progress and monitoring of Blue Economy targets.

For India, the importance of Blue Economy is paramount. India has a coastline of more than 7500 km with 12 major ports and 187 non-major ports which handle more than 90% of India’s trade volume. Blue Economy is imperative to meeting India's socio-economic objectives. While on the one hand, it can help towards building efficiency in trade and connectivity, building energy security, generating sustainable livelihoods, on the other hand, it can build ecological balance. Blue Economy is also the key to India's work towards achieving SDGs of hunger and poverty eradication along with sustainable use of marine resources by 2030.

Policy Interventions and Schemes

 The Blue Economy holds the potential to transform the lives of the coastal communities, accelerate employment and development in coastal areas and boost the overall economic growth in the country. The significance of the Blue Economy could be realized by the fact that it has been identified as one of the ten drivers of economic growth by the Government of India in its Vision of New India 2030. Towards this pursuit, the Government of India has released a Maritime India Vision 2030 document, a draft Blue Economy Policy, Deep Ocean Mission, SagarMala project and has formed a Blue Economy Coordination Committee amongst other initiatives towards sustainably reaping the benefits of marine resources for inclusive growth of the country.

I. Maritime India Vision 2030 Maritime India Vision envisages an overall investment of INR 3,00,000 - 3,50,000 Cr across ports, shipping, and inland waterways categories. This vision roadmap is estimated to help unlock INR 20,000+ Cr worth of potential annual revenue for Indian Ports. Further, it is expected to create an additional 20, 00,000+ jobs (direct and non-direct) in the Indian maritime sector. The economic benefits are expected to come from working in ten strategic areas identified in the vision document.

a. Developing best-in-class port infrastructure: Four key focus areas have been identified to upgrade India’s port infrastructure to increase its market share.  

·         Brownfield capacity augmentation

·          Developing world-class mega ports  

·         Development of transhipment hub in Southern India z

·         Infrastructure modernization.

b. Driving E2E logistics efficiency and cost competitiveness: The overall logistics cost in India is higher than bestin-class benchmarks, primarily as a result of larger hinterland distances and higher unit costs. In order to drive competitiveness and efficiency, the following interventions have been identified: Operational Efficiency Improvement, Better Evacuation, Cost Reduction, Coastal Shipping Promotion, and Port Land Industrialization.

c. Enhancing logistics efficiency through technology and innovation through creation of a National Logistics Portal (Marine), Functional Processes Digitalization across Maritime Stakeholders, Digitalled Smart Ports and Systemdriven port performance monitoring.

d. Strengthening policy and institutional framework to support all stakeholders with a focus on strengthening MCA (Model Concession Agreement), promoting PPP, fiscal support, and financial resilience to enable overall sustainable growth of the sector.

 e. Enhancing global share in ship building, repair and recycling: Indian shipbuilding industry has seen constant falling of its global share which currently stands at less than 1%. Even though India is a leading player in ship recycling, there is ample scope of growth in the ship repair segment. The vision document has identified development of common platforms for ancillary and marine design ecosystem, creation of ship repair clusters and promoting waste to wealth through increased scrap usage in steel industry as key interventions to enhance the country’s market share.

f. Enhancing cargo and passenger movement through inland waterways through terminal infrastructure and fairway development, fiscal and regulatory policies to encourage inland waterway (IW) vessel operators and cargo owners and promotion of Ro-Ro and ferry services in India.

g. Promoting ocean, coastal and river cruise sector: The Indian cruise industry, though in its nascent stage, is growing at over 35% due to multiple government interventions in the last 3 years. Over the next decade, the Indian cruise market has the potential to increase by 8 times driven by rising demand and disposable incomes. Interventions such as terminal infrastructure development, themebased coastal and island circuits, cruise training academies and island ecosystem development could help realise the immense potential.

h. Enhancing India’s global stature and maritime cooperation: India’s trade with the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) nations has grown at an annual rate of 10%+. There is a need to have better connectivity and cooperation with Indian Ocean countries and leading maritime countries such as Norway, Netherlands etc. Steps such as strengthening permanent representation at the IMO (International Maritime Organization), acceptance of common standards, and promoting “ Resolve in India” could further India’s global stature in the maritime sector.

i. Leading the world in safe, sustainable & green maritime sector: India has set a target to achieve 40% national energy through renewable sources by 2030. In promoting SDG Goal 9, Indian ports have started multiple initiatives such as driving solar and wind energy adoption, Swachh Bharat Abhiyan, Swachh Sagar portal for waste management etc.

 j. Become the top seafaring nation with world class education, research and training: India currently accounts for 10-12% of the total seafarers globally, but is facing rising competition from other countries in South East Asia such as Philippines. As a result, promoting research and innovation, enhancement of education and training, development of ecosystem conducive for seafarers and port-led capability development have been prioritized.

The Maritime India Vision (MIV) document has set clear targets with timelines to drive transformation in the maritime sector to reap the benefits of Blue Economy.

II. SagarMala Project

 In line with the Maritime India Vision 2030, the SagarMala Project was launched as a flagship programme of the Ministry of Shipping to promote port-led development in the country through harnessing India’s 7,500 km long coastline, 14,500km of potentially navigable waterways and strategic location on key international maritime trade routes. The main vision of the SagarMala programme is to reduce logistics cost for EXIM (export-import) and domestic trade with minimal infrastructure investment. The four pillars of the project include: port modernization, connectivity enhancement, port led industrialization and coastal community development. As of November 2021, a total of 802 projects worth Rs. 5.53 lakh crore are part of the SagarMala programme. Out of these, 172 projects worth of Rs. 88,235 crore have been completed and 235 projects worth Rs. 2.17 lakh crore are under implementation.

III. Deep Ocean Mission

Deep Ocean Mission was approved by the Cabinet Committee on Economic Affairs chaired by Prime Minister Shri Narendra Modi in June 2021. The estimated cost of the mission will be Rs. 4077 crore for a period of 5 years to be implemented in a phased manner. The estimated cost for the first phase for the 3 years (2021-2024) would be Rs 2823.4 crore. Deep Ocean Mission is a mission mode project to support the Blue Economy initiatives of the Government of India. It has six major components: (i) development of technologies for deep sea mining, and manned submersible, (ii) development of ocean climate change advisory services, (iii) technological innovations for exploration and conservation of deep-sea biodiversity, (iv) deep ocean survey and exploration, (v) energy and freshwater from the ocean and, (vi) advanced marine station for ocean biology.

 In a span of less than five months since the approval of Deep Ocean Mission, India launched ‘Samudrayan’ – the country’s first manned ocean mission. With this, India joined the elite club of select nations like the USA, Russia, Japan, France, and China having such underwater vehicles. The National Institute of Ocean Technology (NIOT), an autonomous institute under the Ministry of Earth Sciences, had developed and tested a personnel sphere - Matsya 6000- for a manned submersible system for 500 metre water depth rating. This personnel sphere of 2.1m diameter is made of titanium alloy and carries upto three people with an endurance of 12 hours and an additional 96 hours in case of an emergency. The sphere has already been tested up to 600 metre water depth in the Bay of Bengal using the research vessel Sagar Nidhi during October, 2021.

Way Forward: Moving the Blue Economy Needle

Oceans have been sustaining mankind since time immemorial through food, livelihood, trade, natural medicines, minerals and what not. Over three billion people depend on marine and coastal biodiversity for their livelihoods. However, today we are seeing 30 percent of the world’s fish stocks overexploited, reaching below the level at which they can produce sustainable yields. Such unsustainable usage of the marine resources has posed serious threat to the ecosystem equilibrium. In this backdrop, the concept of Blue Economy has to be appreciated and adopted at its earliest.

The Blue Economy concept seeks to promote economic growth, social inclusion, and the preservation or improvement of livelihoods while at the same time ensuring environmental sustainability of the oceans and coastal areas. As highlighted under SDG Goal 14: Life Under Water, increasing scientific knowledge, developing research capacity and transferring marine technology, is the key to improve ocean health and to enhance the contribution of marine biodiversity to the development of countries. A series of timebound steps may be further considered to expedite the returns of Blue Economy.

First, a Marine Knowledge Cluster (MKC) may be established as a multistakeholder body with representation from all the Indian Maritime Universities (IMU), maritime centres at institutes like IITs, leading State Maritime Universities, 5-10 foreign universities, industry, civil society think-tanks in the maritime sector and relevant ministries. The MKC will act as a facilitator of scientific developments and promoting research and development in priorities areas for India such as green technology, underwater vehicle design, ship building, navigation technologies etc.

Second, Living Labs on the lines of Singapore Living Labs may be established which will provide physical and digital spaces serving as a cooperation platform between industry, research institutions, financial markets and government facilitating agencies to drive innovation in the maritime sector.

Third, a Blue Economy Research Fellowship for attracting talented students for research/PhDs on the lines of Prime Minister Research Fellowship may also be considered to create a pool of outstanding researchers. In addition, collaboration with top maritime universities across the globe may be formed for technology transfer, advanced research capacity building, and global research collaboration.

Fourth, Industry Chairs may also be established in all the Indian Maritime Universities to foster better industry-academia collaboration which will work towards establishing centres of excellence in critical maritime fields such as marine biotechnology, marine robotics, and unmanned vessels. The Chair may be funded by creating a corpus with contributions from the relevant ministry, industry and alumni. These steps will prove to be instrumental in establishing a strong research and development ecosystem in the maritime sector to boost the Blue Economy growth and establish India as a leading maritime nation. It is only through the power of GyanAmrit that we can achieve the targets of Maritime India Vision as we enter India’s Amrit Kaal.

(About the authors - Amitabh Kant, CEO, NITI Aayog. Pramit Dash- Program Director AIM, NITI Aayog, Piyush Prakash- Senior Associate, NITI Aayog).

Views expressed are personal.