Unfair Gaps🇮🇳 India

Shipbuilding Business Guide

10Documented Cases
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All 10 Documented Cases

आयातित घटक आपूर्ति श्रृंखला जोखिम (Aayatit Ghatak Aapurti Shrinkhla Jokhuim)

Supply chain disruptions = estimated 10-20% project timeline extension; typical impact: ₹50-150 crore delay costs per major vessel

Heavy reliance on imported marine engines, propellers, navigation equipment, marine-grade steel, and specialized systems creates critical path vulnerability. Vendor bankruptcies and logistics delays compound project overruns. L&T mega shipyard experienced 5-month vendor delays on critical shiplift platform plates.

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Change Order Pricing में Manual Bottleneck और Idle Capacity Loss

₹2-4 crore per month during 2-3 month change order cycle; estimated 8-12 weeks idle capacity per order = ₹4-12 crore annual loss per shipyard

Shipyard workers and equipment sit idle during extended LoI-to-contract negotiation phases because final specifications and pricing are uncertain. This is compounded by India's structural disadvantage: outdated production methods, low automation, and weak supplier clusters requiring manual coordination. Result: capacity underutilization and workforce idle time during change order resolution.

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Change Order Processing में Working Capital Cost Overruns

₹4-8 crore per ₹300 crore order (approximately 1.3-2.7% of contract value); 10-10.5% interest rate drag vs. global competitors at ~5-7%

Shipyards must maintain large cash reserves to negotiate change orders and source materials during extended LoI-to-contract phases. High domestic interest rates (10-10.5%) inflate financing costs, especially when government subsidy policies (like SBFA 2.0) lack operational clarity, forcing yards to hold working capital longer than competitors in China/Korea.

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समय-अधिग्रहण सिंड्रोम (Samay-Adhigrahan Syndrome)

~200% time overrun = 50% capacity loss; estimated annual revenue loss: ₹3,000-5,000 crore across Indian shipbuilding sector

Inadequate scheduling and critical path management force Indian shipyards into significantly longer construction cycles (2-3 years) compared to global competitors (1 year). This extends delivery timelines, reduces capacity utilization, deters domestic orders, and erodes competitiveness.

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