Seafarers’ Contribution to the Indian National Economy: A Vital Maritime Pillar

This is series of articles about seafarers’ contribution to Indian Trade and economy. Idea to bring in front the contribution by seafarers at the back drop of Global Maritime India summit 2023. Idea is not to criticise but highlight the very contribution of seafarers in National grind of Economy. Maritime sector is often neglected and that is because the leadership of country needs to understand the Domain. It is specialised domain, so be it but more than that, it is neglected from the layman.

The maritime industry has long been an integral part of India’s economic landscape, serving as a vital conduit for trade, commerce, and connectivity. At the heart of this industry are seafarers, those courageous men and women who navigate the world’s oceans to facilitate global trade. Beyond their undeniable role in shaping India’s maritime prowess, seafarers also wield a significant influence on the nation’s economy, fostering growth and stability through their invaluable contributions. This article delves into the multifaceted impact of seafarers on the Indian national economy, underscored by compelling statistics that highlight their substantial role.

Seaborne trade continues to expand, bringing benefits for consumers across the world through competitive freight costs. Thanks to the growing efficiency of shipping as a mode of transport and increased economic liberalisation, the prospects for the industry’s further growth continue to be strong.

There are over 50,000 merchant ships trading internationally, transporting every kind of cargo. The world fleet is registered in over 150 nations and manned by nearly 2 million seafarers.
The Maritime Industry: A Key Driver of India’s Economy

India’s geographical location, with an extensive coastline stretching over 7,500 kilometres, has historically positioned it as a pivotal maritime nation. The country’s vast territorial waters and strategic location along major international shipping routes have propelled it to be a linchpin of global maritime trade. The Indian maritime sector encompasses shipping, ports, shipbuilding, and associated services, contributing significantly to the nation’s Gross Domestic Product (GDP).

Seafarers, as the backbone of this industry, play an essential role in sustaining and nurturing India’s maritime prowess. Their involvement encompasses a multitude of functions, from operating cargo vessels to ensuring smooth navigation and providing essential shipboard services. The sector also encompasses diverse profiles, including officers, engineers, ratings, and specialized personnel, each making their unique contributions to the industry’s growth.

Seafarers’ Economic Contribution: An Influx of US Dollars

One of the most noteworthy aspects of seafarers’ contribution to the Indian national economy is their ability to bring in substantial foreign exchange reserves. The compensation structure for seafarers is often denominated in major global currencies such as the US Dollar, Euro, or Pound Sterling. This practice results in a consistent inflow of foreign currency, primarily US Dollars, into the Indian economy.

Statistics underscore the magnitude of this inflow. According to the Directorate General of Shipping, India supplies approximately 10% of the global seafaring workforce, with over 240,000 Indian seafarers serving aboard vessels worldwide. In 2021, Indian seafarers collectively earned an estimated USD 6.5 billion in foreign exchange through wages and remittances. This figure vividly illustrates the financial impact of seafarers, bolstering the nation’s foreign exchange reserves and contributing to economic stability.

A Catalyst for Multiple Industries in India

Beyond the direct injection of foreign currency, seafarers also catalyze various ancillary industries within India, generating a ripple effect throughout the economy. The wages earned by seafarers extend to their families and communities, fostering consumption and economic activity. This dynamic stimulates sectors such as retail, real estate, education, and healthcare, thereby spurring growth in both urban and rural areas.

For instance, the real estate sector experiences a notable surge as seafarers invest their earnings in homes and property, contributing to property development and construction. Similarly, the education and healthcare sectors witness a boost as seafarers invest in the well-being and education of their families. The multiplier effect of seafarers’ earnings ripples through the economy, generating employment opportunities and enhancing overall economic vitality.

Supporting Maritime Education and Training

Seafarers’ contributions to the Indian national economy extend beyond their immediate earnings. The maritime industry requires a highly skilled workforce to operate vessels, manage ports, and maintain maritime infrastructure. To meet these demands, seafarers often invest in continuous professional development, training, and education.

In recent years, India has emerged as a hub for maritime education and training, attracting students and professionals from around the world. Indian seafarers, with their wealth of experience, contribute significantly to this educational ecosystem by serving as mentors, trainers, and educators. Their involvement enhances the quality of maritime education, strengthens India’s position as a maritime education destination, and, in turn, generates revenue through tuition fees and related services.

Challenges and Opportunities

Despite their substantial contributions, seafarers also face a unique set of challenges, including prolonged periods of separation from their families, demanding work environments, and evolving regulations. The COVID-19 pandemic further exacerbated these challenges, with crew changes and repatriation becoming complex logistical undertakings.

However, these challenges also present opportunities for India to enhance its support for seafarers. By investing in enhanced welfare measures, promoting work-life balance, and addressing regulatory concerns, India can further elevate its reputation as a seafarer-friendly nation. Such initiatives would not only bolster the well-being of seafarers but also attract more individuals to join the maritime workforce, thereby amplifying the sector’s contributions to the economy.

Conclusion

Seafarers stand as unsung heroes of the Indian national economy, driving the maritime industry forward and enriching the nation’s economic fabric. Their role in facilitating global trade, injecting foreign exchange reserves, and catalysing various industries cannot be overstated. As India continues to expand its maritime reach and influence, acknowledging and nurturing the contributions of seafarers becomes crucial. By supporting their well-being, investing in maritime education, and creating an enabling environment, India can ensure that its seafaring workforce remains a cornerstone of economic growth and stability for years to come.

Marex Media

The Author

Capt Gajanan Karanjikar

Head- Seafarers RIGHTS committee; President AIMPA; & MD- Cordelia Marine Services