The license not only gives permission to carry out shiprepair but also gives some benefits in the form of custom tax exemptions.
The global ship repair market is estimated to be worth $ 10 to 12 billion, with Singapore hogging 20% share and India on the other hand, has only a share of about $100 million.
India is located strategically on the international trade route, it can attract ships plying from west to east in the trade route for its shiprepair activity. This represents increasing market potential for the shiprepair business, as ship owners prefer to repair their ships without deviating from their trade routes as much as possible. But due to lack of infrastructure and focus, the shiprepair industry is not able to reap the benefits. The shipyards involved in shiprepair such as Cochin Shipyard and Hindustan Shipyard have done well in the shiprepair business in the past.
Another reason for high repair potential is the age profile of Indian fleet. As can be seen in the diagram, almost half of the Indian flag fleet is older than 20 years. Older ships require more frequent and extensive shiprepair and maintenance. This translates into large opportunity for a Shiprepair yard in India.