Ocean based Blue Economy: An Insight into the SAGAR as the Last

Growth Frontier

Hamant Maini and Lipi Budhraja1

An insight into the potential linkages between blue economy, economic growth, port

development, international relations and security, and ocean resource conservation,

highlighting the opportunities and challenges for India

I. Introduction:

Oceans cover three-quarters of the Earth‟s surface, contain 97% of the Earth‟s water,
[1]
and represent 99% of the living area on the planet . Oceans are claimed to be „last

frontiers‟ of growth and development, but the immense potential that the Oceans present

remains to be tapped fully. However, this potential needs to be harnessed in a balanced

manner, where the preservation and health of Oceans are given their due importance, along

with adherence to the United Nation's Sustainable Development Goal #14 that states

“Conserve and sustainably use the oceans, seas and marine resources for sustainable

development [2].“

The Ocean-based Blue Economy is the next sunrise issue for development experts.

Dr. Gunter Pauli introduced this concept in the book – "The Blue Economy: 10 years, 100

innovations, 100 million jobs". Blue Economy is based on the idea to use locally available

resources and employ renewable inputs, for example, "ocean-as-a-resource" that addresses
[3]
the problems of resource scarcity and enables sustainable development . This marine-

based economic development will reduce environmental risks and mitigate ecological

challenges. As a result, the optimized and responsible resource utilization will enable to

achieve balanced socio-economic development.

II. Economic and Trade Potential:

The Indian Ocean Region is abundant with resources, particularly in the sectors of

fisheries, aquaculture, ocean energy, sea-bed mining and minerals, and provides

1
Hamant Maini and Lipi Budhraja are Young Professionals associated with Office of CEO, NITI Aayog

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tremendous economic opportunities to develop marine tourism and shipping activities.

Among these resources, fisheries and minerals are the most commercially viable industries.

Commercial and artisanal fisheries sustain the livelihoods of more than 38 million people

worldwide.

In the Indian Ocean, fish production increased drastically from 861,000 tons in 1950

to 11.5 million tons in 2010. The United Nations Food and Agriculture Organization (FAO)

report states that while other world oceans are nearing their fisheries limit, in certain areas,

the Indian Ocean‟s resources have the potential to sustain increased production.

Polymetallic nodules and polymetallic massive sulphides are the two mineral

resources of commercial interest to developers in the Indian Ocean. Typically found at four

to five km in water depth, polymetallic nodules are golf-to-tennis ball-sized nodules

containing nickel, cobalt, iron, and manganese that form over millions of years on the

sediment of the seafloor. India had received exclusive rights for the exploration polymetallic

nodules in 1987, in the Central Indian Ocean Basin. Since then, it has explored four million

square miles and established two mine sites.

A strong impetus on Research and Development, and Innovation in the areas of

Ocean Energy, Marine Biology and Biotechnology must be provided for the nation to achieve

significant market shares in these sectors.

It is necessary for India to tap the enormous potential of the Ocean based Blue

Economy, which will propel the nation into a higher growth trajectory. The development of

Blue Economy can serve as a growth catalyst in realizing the vision to become a $10 trillion

economy by 2032. Additionally, the Indian Ocean Region is of strategic importance to India‟s

economic growth as the most of the country‟s oil, and gas is imported through the sea.

Further, this dependency is expected to rise by 2025 exponentially.

The Indian Ocean Region presents tremendous trade potential for the country. The

countries in the Indian Ocean Rim Association (IORA) exhibited significant dynamism in the

past few years as the trade in the region increased by over four times from US$ 302 billion in

2003 to US$ 1.2 trillion in 2012 [4].

2
 The Sagarmala project, launched by the Ministry of Shipping, is the strategic initiative

for port-led development through the extensive use of IT enabled services for modernisation

of ports. It tackles the issue of underutilized ports by focussing on port modernization,

efficient evacuation, and coastal economic development. The government has allocated over

Rs. 3 lakh crore to fund 199 projects under the Sagarmala programme to be implemented in

the next three years. Of these identified programmes, projects of more than Rs. 1 lakh crore

are already under implementation [5]. Moreover, the Union Budget of 2017-18 has increased

the allocation to the project from Rs. 406 crore (RE 2016-17) to Rs. 600 crore (BE 2017-18),

giving further impetus to the port-led development.

Under the Make in India program of the Government, shipbuilding industry can

benefit from a major thrust. This industry has a high multiplier effect on investment and can

accelerate industrial growth along with its large number of associated industries. In

December 2014, India had a fleet strength of just over 1,200 ships, which is expected to
[6]
reach over 1,600 by 2025 . A strong push in India‟s commercial shipbuilding and ship

repair sectors, complementing the Sagarmala project of port development have the potential

to drive economic transformation.

III. International Relations and Security:

The Indian Ocean has always enjoyed a place of prominence in global strategy.

Many nations have established a presence in the region to ensure their strategic interests.

India was very active in the UN Adhoc Committee that was set up on the Indian Ocean and

supported the cause of keeping the Indian Ocean, a Zone of Peace during Cold War.

However, with the re-emergence of piracy issues and growing importance to secure

the oceanic ecosystem, India has been pro-actively involved in cooperative arrangements

with like-minded neighboring countries. The „Trilateral Cooperative in Maritime Security

between India, Sri Lanka, and Maldives‟ is one such example.

3
 The India Maritime Security Strategy published by the Indian Navy articulates

country‟s policy in the Indian Ocean region. It states that in the Indian Ocean region, India is

committed to:

(i) Ensuring a safe, secure and stable Indian Ocean Region;

(ii) Deepening security cooperation, through increased surveillance and monitoring with

regional partners;

(iii) Forging a multilateral cooperative maritime security initiative in the Indian Ocean to

combat terrorism and piracy;

(iv) Deepening cultural linkages with the people in region; and

(v) Building Indian Ocean Region as a frontier of sustainable economic development [7].

However, notwithstanding the above, other compelling issues demand a coordinated

approach among stakeholders in the region in combating the plaguing issues of the rise in

narco-terrorism and human trafficking. These need to be tackled by strengthening trans-

oceanic partnerships and developing a synchronized strategy for a way forward.

IV. Way Forward for India

In this era of advanced technology, oceans will become new centers of economic

activity. Oceans already account for significant trade and commerce in the fields of shipping,

offshore oil and gas, fishing, undersea cables, and tourism. Besides these areas, there are

other emerging industries such as aquaculture, marine biotechnology, ocean energy and

sea-bed mining that have the potential to create jobs and spur worldwide economic growth.

The Indian Ocean region needs a sustainable and inclusive framework for

international partnerships. Countries in the region need to not only coordinate and manage

the growing security challenges in the region but also realize the substantial economic

potential the Indian Ocean area presents. India has significantly upped its development

efforts in Seychelles, Mauritius, Africa, and Sri Lanka. Such an approach earmarks a shift

from the traditional focus on naval operations and anti-piracy efforts to that of environmental

4
protection, national security, infrastructure creation, industrial capacity building and marine

development.

India‟s commitment to strengthen its cooperation with the regional partners and build

a sustainable ocean economy aligns well with its domestic mega-modernisation projects that

will enable the nation to harness the full potential of the Ocean based Blue Economy.

________________________________________

[1] "Ocean and Coastal Area Governance| UNDP." http://www.undp.org/. 11 Jul. 2016

<http://www.undp.org/content/undp/en/home/ourwork/environmentandenergy/focus_area>.

[2] "Conserve and sustainably use the oceans, seas and marine ..." http://www.undp.org/. 11

Jul. 2016 <http://www.un.org/sustainabledevelopment/oceans/>.

[3] "Blue Economy - IORA - Indian Ocean Rim Association." www.iora.net. 11 Jul. 2016

<http://www.iora.net/blue-economy/blue-economy.aspx>.

[4] "External Affairs Minister's address at International" http://mea.gov.in. 11 Jul. 2016

<http://mea.gov.in/Speeches-Statements.htm?dtl/24994>.

[5] “Budget Session 2017: Here's the full text of President Pranab Mukherjee's speech”. 2

Feb. 2017 <http://economictimes.indiatimes.com/news/politics-and-nation/budget-session-

2017-heres-the-full-text-of-president-pranab-mukherjees-speech/printarticle/56888752.cms>

[6] [7] "Ensuring Secure Seas: Indian Maritime Security Strategy" http://indiannavy.nic.in/. 11

Jul. 2016 <http://www.spsmai.com/military/?id=3825&q=Ensuring-Secure-Seas:-Indian-

Maritime Security Strategy>.