Sailing towards stability

The origins of navies worldwide date back thousands of years, as early civilizations developed maritime forces for trade, exploration, and military purposes. Yet, from the beginning, if there is one aspect that has not changed, then it is the triumvirate relation of the Nation, Navy and Economy – in war and peace. It may seem obvious that the presence of a navy is a surety of protection of seaborne trade. What may not be obvious is the degree of the impact as well as the variety of other ways that the navy impacts the nation’s economy. That there are no active conflicts on the maritime front is in itself a reflection of the effectiveness of the Indian Navy. Yet, for a nation that is on its path to being the third-largest economy by GDP numbers, India’s international trade has been overwhelmingly dependent on the seas. Combining imports and exports, India’s total trade volume is highly dependent on international markets, with over 90 per cent of its trade volume (in monetary terms) being transacted overseas. According to data from the Ministry of Shipping and related reports, over 90% of India’s trade by volume and approximately 75 per cent of India’s total trade by value is conducted via sea routes. Essentially, the seas are what sustain India’s international trade. Should sea lines be threatened, the Indian economy would take a big setback.

So where does the Indian Navy figure in the scheme of things when it comes to international trade and sea routes? After all, it is the merchant marine which is carrying the trade. Let us look at recent incidents. Insurance rates for ships transiting the Red Sea and the Gulf of Aden have risen sharply due to escalating threats from Houthi rebel attacks in the region. This increase in insurance rates is further compounded by rising freight costs as many vessels reroute around the Cape of Good Hope to avoid the high-risk area, which adds time and expense to shipping operations.

The overall situation has made Red Sea transits increasingly costly for shipowners and charterers. This sharp increase reflects the elevated risks to shipping in the area due to missile and drone attacks on commercial vessels. Essentially, when insurance premiums go up, it affects the profit margins of exports; and increases product costs for imports. In both cases, the manufacturer and customer suffer or in short, the economy of the nation suffers.

Things were worse a little over a decade ago closer to the Indian coast. Following a surge in piracy in the period 2008 to 2012, insurance premiums had risen starkly. Decisive action by the Indian Navy not only on the high seas but through official channels with the Indian polity resulted in the HRA being redefined and restricted to only the Gulf of Aden and the waters off Somalia. The Indian Navy has since ensured that the HRA did not expand towards the Indian coast. Since 2008, the Indian Navy has deployed units in the Gulf of Aden and East coast of Africa towards anti-piracy patrols. More than 3,500 ships and over 25,000 seafarers have been safely escorted to date. These figures continue to move forward with each passing day.

The Indian Navy’s contributions to the economy have been on numerous fronts over the past decades. For instance, through its round-the-year deployments, the Navy safeguards India’s EEZ, which spans 2.37 million square kilometres, ensuring the security of resources like fisheries, oil, and gas. The Navy has been supporting Blue Economy initiatives by preventing illegal, unreported, and unregulated (IUU) fishing, the Navy helps secure livelihoods for millions dependent on marine resources. Protection of offshore oil and gas platforms, which are critical to India’s energy security and economy has also been a round-the-year effort. In the third week of November this year, the Navy executed Exercise Sea Vigil, a multi-disciplinary multi-agency coastal security exercise that extended across India’s entire coastline across all states and Union Territories as well as EEZ. These activities have a direct bearing on shipping firms across the world in deciding to use Indian ports as transhipment options. The past decade in particular has witnessed a surge in India’s military diplomacy. Of the three services, undoubtedly, the Indian Navy’s reach across the globe in terms of scale, spread and consistency has been unmatched.

The Navy was also the first to jump onto the indigenisation and self-reliance bandwagon in a big way. Despite the initial iteration of a variety of products being perhaps a few notches less than ideal, the Navy always maintained its persistence with indigenous shipbuilders and industries. Indigenous warship construction requires materials like steel, electronics, and specialised machinery. The Navy’s support to domestic shipyards by commissioning indigenous warships, submarines, and auxiliary vessels, provided the much-needed shot in the arm for the ‘Make in India’ mantra. Shipyards and related industries create significant direct and indirect jobs, from skilled labour to auxiliary services. The construction of INS Vikrant, for instance, involved over 500 Indian companies, illustrating the large-scale participation of domestic industries.

The Navy has perhaps been the lynchpin or the front end of the PM’s vision of the SAGAR initiative or ‘Security and Growth for All in the Region’, fostering maritime connectivity and trade with neighbouring countries, and enhancing regional economic integration. These have not been mere slogans. Humanitarian Assistance and Disaster Relief or HADR is often viewed as merely a humanitarian activity and not through the prism of economic contribution. At best, a noble gesture in the face of odds. Yet, the Navy’s humanitarian efforts during natural disasters, like cyclones and tsunamis, help protect coastal economies and enable faster recovery of affected areas. In effect, the bouncing back of the economy, especially in the case of coastal infrastructure, aids the economy to spring back.

Evacuation missions, such as during conflicts or crises abroad, protect the economic interests of Indian citizens overseas. During the 2006 Lebanon War, approximately 2,300 Indians were evacuated under Operation Sukhoon. In March 2015, under Operation Rahat, the evacuation of 5,600 people, including 4,640 Indians and 960 foreign nationals from 41 countries was undertaken by the three Indian Naval ships along with two merchant ships. Today an Indian citizen in a crisis whilst working on foreign soil is assured that he/she will be rescued by its government and hence is willing to spend more time abroad contributing towards the Indian economy by remitting foreign exchange. This confidence stems from repeated non-combatant evacuation (NEO) missions undertaken by the Indian Navy even in hostile situations.

The destinies of any nation, its navy and its economy are intertwined. A strong navy therefore is the surest guarantor of a growing economy. By safeguarding maritime interests, ensuring security, and supporting economic activities, the Indian Navy has been and will continue to be a critical pillar of India’s economic stability and growth.

The writer is a Communication and Electronic Warfare specialist with over two decades of commissioned service. Views expressed are personal