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India: An Emerging Naval-Maritime Maintenance, Repair and Overhaul Destination

Sub Title : A commentary on India’s emergence as a hotspot for maritime support

Issues Details : Vol 18 Issue 1 Mar – Apr 2024

Author : Dr Vijay Sakhuja, Former Director, National Maritime Foundation

Page No. : 40

Category : Military Technology

: March 22, 2024

In an era where maritime security is paramount, this article explores the critical role of naval Maintenance, Repair, and Overhaul (MRO) against the backdrop of geopolitical tensions. Highlighting key regions like the Red Sea and Persian Gulf, it delves into the complexities of maintaining naval fleets, underscoring the strategic importance of international collaborations and technological partnerships. With a focus on India’s rising prominence in the global MRO landscape, it reveals the intricacies of ensuring naval readiness in a rapidly evolving geopolitical arena.

The ongoing conflicts in different regions are spilling into the seas and attracting naval forces in areas of tension to ensure safety and security of sea based commerce. The Red Sea, Gulf of Aden and the Persian Gulf are good examples. By some estimates, over 50 naval vessels are currently operating in the North Arabian Sea, and many more countries are planning to send their warships to the region.

These deployments are noteworthy and bring prestige to respective nations by showcasing their ability to keep ships in high state of readiness for long periods in troubled regions.  However, these vessels require regular inspections and ‘maintenance, repair and overhaul’ (MRO) to ensure that critical systems and components do not fail or malfunction. Furthermore, ship’s war fighting efficiency should be at its top level and costly overhauls which add to operating costs are brought to the minimum.

MRO is a highly complex marine technology sector. The Boat and Ship MRO Market size is estimated at US$ 136.53 billion in 2024, and is expected to reach US$ 165.47 billion by 2029, growing at a CAGR of 3.92% during the forecast period (2024-2029). Similarly, the Naval Vessels MRO Market size is quite promising. It was valued at US$ 56.67 billion in 2023. It is projected to touch US$ 64.87 billion by 2030, growing at a CAGR of 1.96% during the forecasted period 2024 to 2030.

However MRO is mired in geopolitics, strategic contestations, technical competitions and sanctions. For instance the ongoing Russia-Ukraine war has curtailed supply chains of critical spares and lack of maintenance support for Russian naval vessels and flagged merchant fleet at ports across the globe has led to a crisis situation in the country. This prompted Prime Minister Mikhail Mishustin to call for “technological sovereignty” through domestic research and development which should also stimulate Russian economy and open new industries and create jobs.

At another level, countries sign technology support agreements with alliance members and partners to ensure MRO of their naval fleets and aircraft. There are several examples and these have so far served well to keep fleets afloat for sustained deployments. For instance in 2023, ST Engineering, Singapore and Boeing, an aviation leader signed a Memorandum of Understanding (MoU) to collaborate in “systems integration, training, local parts distribution, support, and sustainment work for the P-8A Poseidon”, a maritime patrol aircraft operated by several countries including India.

US Navy Makes Beeline for India

The 4th and the 5th India-US 2+2 Ministerial Dialogues have reaffirmed that the Roadmap for Defence Industrial Cooperation is a “catalyst for strengthening India’s capabilities, enhancing its indigenous defence production, facilitating technology-sharing, and promoting supply chain resilience”… “Both sides recommitted to spurring investment in India’s growing maintenance, repair and overhaul (MRO) sector, which encompasses aircraft maintenance and mid-voyage repair of US naval vessels. They welcomed commitments from the U.S. industry to further increase India’s MRO capabilities, including for the repair of aircraft and unmanned aerial vehicles”.

In particular, the five-year Master Ship Repair Agreement (MSRA) between the U.S. Navy and the L&T Shipyard at Kattupalli is noteworthy and merits attention. MSRA qualifies a shipyard to compete for carrying out ship repair projects for US Navy.

According to a press release by the Indian government i.e. Press Information Bureau (PIB), the MSRA includes “clauses on security, payments, liabilities etc. The agreement is reviewed every five years, or as required”. Till date three US Navy vessels USNS Charles Drew, USNS Matthew  at Perry and USNS Salvor have undergone repairs/maintenance at the state-of-the-art L&T shipyard at Kattupalli  in Tamil Nadu on India’s east coast. Meanwhile, MSRA with M/s Mazagon Docks Limited and M/s Goa Shipyard Limited is at an advanced stage.

The Cochin Shipyard Limited (CSL) is yet another candidate for MRO. It has in the past successfully completed repairs, refits and life extension projects of over 2500 merchant ships and naval vessels including aircraft carriers. The shipyard has recently added new capacity through the New Dry Dock (NDD) and expansion of the International Ship Repair Facility (ISRF). It is perhaps the largest in the region and reflects India’s engineering prowess and project management capabilities of the country. CSL is a strategic asset and incorporates latest technology and innovations to ensure efficiency, safety, and environmental sustainability. The ISRF is known to provide “rapid turnaround for India’s Naval and Coast Guard ships and will soon have capacity for nearly 80 vessels or more per year”.

In this context it is useful to recall the technical support provided to Philippines’ ship BRP Ramon Alcaraz after a fire broke out. The ship was repaired by Indian Navy’s Technical teams from Naval Ship Repair Yard (Kochi) in close coordination with the Philippine crew and rendered the ship seaworthy within 10 days.

The Master Ship Repair Agreement (MSRA) with India is an US acknowledgment of India’s growing maintenance, repair and overhaul (MRO) sector, which also encompasses aircraft maintenance (P8-I/A) and unmanned aerial vehicles. The U.S. Consul General in Chennai had remarked that the MSRA will “fast-track U.S. Government contracting processes for repair work and advances the Indian government’s indigenous production and logistics goals” which is a win-win case.

This should act as a catalyst for the ancillary industry wherein Indian vendors manufacturing defence shipbuilding equipment can support US naval requirements. Currently 64 out of 66 ships and submarines under order are being built in Indian shipyards which is a reflection of the capacity of the Indian shipyards, capabilities of the workers as well as the ancillary industries.

Russia and Indian MRO

Russia has been a traditional supplier of military hardware to the Indian military. The Indian Navy acquired several ships, submarines and aircraft from Soviet Union/Russia and had put them to combat use during the 1971 Indo-Pakistan war.  However it remained dependent on Russia for spares and repair assistance due to lack of infrastructure at home; however, “over the years, cooperation in the military technical sphere has evolved from a purely buyer-seller relationship to joint research, design development and production of state of the art military platforms. Production of the Brahmos cruise missile is an example of this trend”.

Interestingly, Indian entrepreneurs emerged as important stakeholders in the India Russia military cooperation. In 1995, Krasny Marine Services Pvt. Ltd (KMS) was established to render customized technical and logistic support to the Indian Navy, Indian Coast Guard, public sector Shipyards and Defence Research and Development Organisations. The agency is manned and managed exclusively by officers and technicians retired from the Indian Navy and defence shipyards. In 1998, KMS established its avionics division at Goa for repair and servicing of Russian origin aircraft and became the first Indian company to be accredited by the Centre for Military Airworthiness and Certification (CEMILAC).

Civilian MRO

There are nearly 75000 vessels operating at sea across the oceans and according to the UNCTAD, the global seaborne trade is expected to grow 2.4% in 2023, and more than 2% between 2024 and 2028. The global civilian ship repair market is currently estimated to be US$ 25-30 billion and India’s MRO capacity is about one per cent; but the country is committed to emerge as ship repair hub by creating ship repair clusters in India.

India is strategically located along the major sea route east to west and vice versa, and 7 to 9 % of the global trade passes within 300 nautical miles of its coastline. This geographic reality represents that India can potentially be the preferred destination for ship repair business. This assumption is also reinforced by the fact that it makes lot of business sense for the shipping companies to undertake MRO of their fleet in the area of their operations “without deviating from their trade routes as much as possible”.

According to Maritime India Vision, 2030, China, Singapore, Bahrain, Dubai and Middle East are the leaders in ship repair business; this is largely due to “availability of a skilled workforce and latest technology”.  Besides this competition, there is “a capability gap of Indian yards in repairing certain kinds of vessels” given that only 5-6 shipyards out of a total of 24 shipyards in the country carry out any significant repair jobs. Also, “high cost of financing, lack of supply of ship spares in India and technology related issues increasing ship repair execution cycle time” are other areas of concern.

The Indian government plans infrastructure creation of two Ship Repair Clusters in the east and west coast as also explore joint ventures with cruise ship building and repair for repairs in India. It is also planned to build specific training infrastructure and programs for skilling.

Concluding Thoughts

Many different types of US warships, support vessels and aircraft can be expected to make beeline for Indian shipyards. India, can emerge as a preferred hubs for the maintenance of naval vessels particularly for the QUAD Member countries as well as other likeminded navies who have forward deployed their forces in the Indian Ocean.

Similarly, Russian military and merchant vessels operate on regular basis in the Indian Ocean. The Indian maritime maintenance, repair and overhaul (MRO) capacities are quite significant and a promising factor for the India Russia maritime cooperation. This arrangement can be offered in the Caspian Sea where Goa Shipyard built vessels will be operating.

Source: ‘Status of Ship building, Ship Repair and Ship breaking industries in the Country’ Parliament of India, Rajya Sabha, (Presented to the Rajya Sabha on 08th February, 2024) (Laid on the Table of Lok Sabha on 08th February, 2024)