The Indian shipyards saw its global market share slump down from 1.23 per cent in 2007 to 0.14 per cent in 2010 due to global economic slowdown and other factors, the government said today.
"As per estimates of Shipping Ministry, the share of Indian shipyards in new order for ship-building slumped from a high of 1.23 per cent in 2007 to 0.14 per cent of world order in 2010," Defence Minister A K Antony, in a written reply to Rajya Sabha, said.
He said the Shipping Ministry has attributed the main reasons for this slowdown to inability of Indian shipyards to compete with their foreign counterparts due to incidence of taxation and withdrawal of subsidy, besides global economic downturn.
"As far as Defence Ministry is concerned, Indian shipyards both in public and private sectors are encouraged to participate in naval acquisition programs, provided they have requisite capacity and necessary capability to deliver required platforms with quality and performance parameters within the timelines," he said.
Antony said the Shipping Corporation of India has been asked to conduct a feasibility study for setting up a new shipyard of international standard on PPP model as joint venture.
The government has already given an in-principal approval for setting up the shipyard.
On the issue of strengthening the indigenous defence industry, Antony said, "There has been a major thrust on indigenous manufacture of defence equipment through collaborative efforts of DRDO, Defence Public Sector Undertakings, OFB and private sector."
The defence industry was opened up for Indian private sector participation in May 2001 with FDI allowed upto 26 per cent. With a view to achieve greater self-reliance, the government announced a Defence Production Policy (DPP) in January last year.
Stating that procurement from indigenous sources accounts for about 65 to 70 per cent of expenditure on capital acquisition, Antony said that a new 'Buy Indian and Make Indian' category was included in DPP in 2009 to encourage indigenous production.
In reply to another question, Antony told the House that six foreign firms have been debarred from further business dealing with OFB, Department of Defence Production, Ministry Defence for a period of ten years for their involvement in corruption.
Singapore Technologies Kinetics, Israel Military Industries, T S Kisan and Co, R K Machine Tools Ltd, Rheinmetall Air Defence and Corporation Defence were debarred by the Defence Ministry last month.