Discuss the role of state subsidies in the growth of long-haul shipping, then and now, in the context of India's ambition to become a maritime power.

Long-haul shipping needs a lot of capital, takes years to pay back and earns thin margins, so it has rarely grown without state support. In 1926, businessmen proposed a fast Britain–Australia liner service calling at Bombay and Colombo, and the plan rested on mail subsidies [1]. A century later, India uses the same tool, this time for national rather than imperial ends.

Subsidies then: sustaining imperial sea lanes

• Mail subsidy as base revenue: the promoters asked for the same subsidies already paid to mailship companies, for a fixed period [1].
• Guaranteed traffic: they also wanted immigrant traffic to Australia beyond what the Commonwealth line carried [1].
• Speed costs money: the 22-knot liners were "half as fast again" as the existing weekly mail ships, which made them viable only with public support [1].
• Colonial skew: the capital (£11 million) was raised and the ships built in Britain. India got only ports of call, and the "five days nearer" gain was measured from London [1].

Subsidies now: building national capacity

• Foreign-ship dependence: about 95% of India's trade by volume and 68% by value moves by sea [2], yet Indian ships carried only 4.11% of overseas trade in 2023-24 [3]. Freight paid to foreign ship owners weakens the balance of payments.
• Shipbuilding Financial Assistance Scheme: a ₹24,736 crore corpus running till March 2036, giving 15–25% assistance per vessel [4]. The top 25% rate is for green or specialised vessels [5].
• Shipbuilding Development Scheme: ₹19,989 crore for long-term capacity [4].
• Domestic linkage: assistance goes only to ships built in Indian yards, so jobs and skills stay at home. This reverses the 1926 pattern.

Limits of subsidy-led growth

• Dependency risk: open-ended support breeds inefficiency. The 2015 policy therefore cut assistance from 20% by 3 percentage points every three years [3].
• Ships without cargo: the 1926 scheme needed assured traffic. Likewise, new ships alone will not lift the 4.11% share without Indian cargo to carry [3].
• Fiscal cost: large outlays compete with other development priorities.

In both periods, subsidies bridged the gap between what long-haul shipping costs and what it earns. The difference is who benefits. India's subsidies should be time-bound and tapering, and their success should be judged by how much of India's cargo Indian ships carry, not just by tonnage built. Combined with cargo support and green-ship incentives, they can turn India from an imperial port of call into a maritime power, in line with SDG 9 on resilient infrastructure.