MARCH 2017

ISSUE NO. 173

Blue Economy: Beyond

an Economic Proposition
SONALI MITTRA

ABSTRACT 'Blue economy' is the integration of ocean economy development with values of
social inclusion and environmental sustainability, along with dynamic and innovative
business models. For India, however, blue economy extends beyond being merely an
economic and environmental proposition. It presents India with an unprecedented
opportunity to meet its national objectives, strengthen connectivity with neighbours, and
exert influence in the surrounding regions. This paper argues that India should take
advantage of the economic development of the Indian Ocean and examines how India can
assume a leadership role in the region.

INTRODUCTION

As the economies in the Indian Ocean Region economy' presents a unique and unprecedented
(IOR) continue to demonstrate growth and opportunity for India to reframe its approach in
development, the region has become one of the managing the ocean. While the economic
most promising economic and political areas of prospects of blue economy are recognised, its
the world. At the same time, rising security potential as a political instrument is less
issues related to the critical sea trade routes, the appreciated. India must develop a
militarisation of the ocean space, and the hunt comprehensive strategy to seize the potential of
for hydrocarbon and mineral resources are all blue economy by contextualising its idea and
contributing to the transformation of the IOR. articulating why it matters to the country.
Once declared as a 'zone of peace' by the United 'Blue economy' refers to the greening of
Nations Charter of 1971, the IOR is currently ocean development strategies towards higher
experiencing new security challenges. Under productivity and the conservation of the
1
the current circumstances, the so-called 'Blue ocean's health. In the development of oceans,

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 Blue Economy: Beyond an Economic Proposition

blue economy adopts the principles of green
economy, including low carbon emissions,
resource efficiency, and social inclusion. It also
features in Goal 14 of the Sustainable
Development Goals (SDGs): to conserve and
sustainably use the oceans, seas, and marine
2
resources for sustainable development. In
recent years, international support and
cooperation for the development of blue
economy 3 has gained further strategic
importance.
The idea of blue economy has distinct
relevance to India. For a country struggling to
meet its development objectives, blue economy
offers another path in the pursuit of growth and
development, and ecological sustainability.
Although India's policies and plans of the past
have re co g nise d the scop e of o cean
development, 4 an overarching strategic
vision which incorporates the new elements
such as maritime security, environmental
sustainability, and new and innovative forms of
cooperation is absent. To begin with, India
must consider three critical and basic
intentions: national developmental objectives,
connectivity infrastructure, and regional
influence.
NATIONAL DEVELOPMENT OBJECTIVES
A blue economy strategy should align with the
country's national development objectives.
After all, India has the seventh longest coastline
in Asia at 7,516.6 km, covering nine states and
two union territories.5 These states are not only
highly vulnerable to natural disasters, lacking in
resilience and adaptive capacity, but are also
faced with development deficits, to begin with.
The coastal population of India which stands
6
at 560 million is bigger than the entire
population of South America. Yet, the debate
around rising sea levels, pervasive fishing
practices and desalination has been set by the
smaller island states. This needs to change, and
India must begin to take a more proactive role in
global discussions on ocean resources.
These nine states and two union territories
along India's coast show distinct developmental

Table 1: Key Development Indicators for coastal states in India

Coastal States Poverty Rate Unemployment GDP Contribution Service Sector
(2010-11) Rate (2015-16) (2013-14) Growth Rate
(2013-14)
Gujarat 16.63 0.9% 7.31 12.7%

Maharashtra 17.35 2.1% 14.4% 9.3%

Goa 5.09 9.6% 0.5% 10.3%

Karnataka 20.91 1.5% 5.9% 8.0%

Kerala 7.05 12.5% 3.8% 5.5%

Tamil Nadu 11.28 4.2% 8.2% 9.3%

Andhra Pradesh 9.2 3.9% 4.4% 7.2%

Odisha 32.59 5.0% 2.6% 8.7%

West Bengal 19.98 4.9% 6.8% 9.4%

Daman & Diu 9.86 0.3% - -

Pondicherry 9.69 4.9% 0.2% -

All India rate 21.29 5.0% 9.0%

Source: Labour Bureau (2016), MOSPI (2015), NSSO (2011)

2 ORF ISSUE BRIEF No. 173 • MARCH 2017

 Blue Economy: Beyond an Economic Proposition
trends (See Table 1). While Odisha, for example,
7 15
has the highest poverty rate, Kerala has the
largest number of unemployed people among
the coastal states.8 As compared to other coastal
s t ate s , M a h a ra s h t ra h a s t h e l a r g e s t
contribution to India's GDP at 14.4 percent,9
while Gujarat recorded the highest growth rate
10
in 2014 in the service sector at 12.7 percent.
These coastal zones are mostly engaged in
activities like fishing, agriculture, tourism,
residential and commercial development, and
oil exploration.11 Industry and service sector
development in these regions have been slow,
especially the mining and ocean renewable
energy sectors.
Blue economic development, focused on
livelihood generation, achieving energy
security, building ecological resilience, and
improving health and living standards of
coastal communities, would reinforce and
strengthen the effor ts of the Indian
government as it strives to achieve the SDGs by
2030.
Lessons from Other Countries' Blue Economy
India would do well to look to other countries
for examples of best practices in blue economy.
The strategies of Australia, China, and
Mauritius, for example, view the potential of
sustainable ocean economy in meeting their
countries' development objectives. In Australia,
offshore oil and gas and aquaculture industry
have dominated the blue economy; in
Mauritius, meanwhile, coastal tourism and
seaport-related activities contribute the largest
share; and for China, fisheries, tourism, and
transport lead its marine economy.12
The contribution of the marine services
sector in economic growth and employment
generation is indisputable in all these three
ocean countries. The size of the blue economy is
estimated to be $47 billion (2011-12) in
Australia13 and $90 million for Mauritius.14 In
China, the ocean economy contributed 4.03
ORF ISSUE BRIEF No. 173 • MARCH 2017
percent to GDP in 2010 and employed 9.25
million people. Future plans and policies of
these countries have laid additional emphasis
on innovation, mar ine res earch and
development, and marine information and
communication technologies (ICT).
For India, the marine services sector could
be the backbone of its blue economy. In line with
the 'Digital India' and 'Make in India' initiatives
of the Modi government, India must focus on
marine ICTs, and transport (shipping) and
communication services, and the creation of a
knowledge hub for marine research and
development, alongside the more traditional
sectors like fisheries and coastal tourism. At the
Indian Ocean Rim Association (IORA) Blue
Economy Ministerial Conference in 2015, India
emphasised on Marine ICTs as a key emerging
sector of its blue economy.
THE ROLE OF CONNECTIVITY
If India is to further its blue economy strategy, it
must pay particular attention to strengthening
connectivity. For one, sea routes in the Indian
Ocean carry up to 90 percent of India's trade.16
This is only one of the reasons why sea-route
and inland water connectivity assumes
importance for India in its push to nurture its
blue economy. Other significant benefits
include employment generation, and a boost to
the country's industrial development through
the provision of a more fuel-efficient, cheaper
and reliable mode of transportation.
At present, India has 13 major ports for
coastal and international trading. The number
of vessels and cargo traffic of India has been
increasing consistently in the past decade,
reaching some 1,052.21 million tonnes in 2014-
17
15 (See Figure 1). According to the Indian
Maritime Agenda 2010-2020, it is expected that
port capacity will increase to 3,130 million
tonnes by 2020.18
While sea-route connectivity is of critical
importance, the linkage between inland water
3
 Blue Economy: Beyond an Economic Proposition
Figure 1: Growth of Indian Shipping Industry (2010-15)
1300
1250
1200
1150
1100
1050
1000
950
900
2010 2011 2012
No. of Vessels
Source: Ministry of Shipping (2015)19
navigation (IWT) and sea routes has received
insufficient attention. India has five national
waterways and one more under construction.
Investment in the order of $3.4 billion is needed
to meet the infrastructural deficit, including
terminals, ports, roads and rail connectivity.
Further evaluation is required to gauge the
complementarity between sea and inland water
connectivity, which can strengthen marine
industrial and commercial development. The
creation of the Coastal Economic Zones (CEZs)
and the 'Sagarmala Project' are welcome moves
in this direction. However, further efforts will be
required to avoid fragmentation and
overlapping of policies, while also creating a
sustainable framework for the development of
connectivity infrastructure. Principles of blue
economy, therefore, will be important in
creating complementarity between discrete
plans and policies, which have a common broad
objective of sustainable ocean development.
REGIONAL AND GLOBAL INFLUENCE
The third consideration is the geopolitical
dynamics in the Indian Ocean Region from
which the development of blue economy cannot
be detached. The IOR is critical for trade and
4 ORF ISSUE BRIEF No. 173 • MARCH 2017
10.5
10
9.5
9
8.5
8
7.5
2013 2014 2015
Average GRT
energy supplies as important Sea Lines of
Communications (SLOCs) pass through this
region. It also holds 40 percent of the global
reserve of oil and gas, and has a large
unexploited potential of sea-bed mineral
resources. The region is facing serious threats
and challenges to security, including increasing
forays of China, the presence of extra-regional
powers (US, Russia, Australia and Japan), and
the rise of international piracy.
Taking cognizance of this, India redefined its
maritime strategy in 2015 (Ensuring Secure Seas:
Indian Maritime Security Strategy) to expand the
geographical extent of its strategic interests by
including the Indo-Pacific region, the Red Sea,
and South-east Indian Ocean; and to develop its
role as a 'net security provider' in the IOR.
India's aspiration to be a credible leader in the
Indo-Pacific security architecture complements
its vision for blue economy development.
While sovereignty and security have been
the traditional focal points in the Indian Ocean
debates, blue economy provides a deeper impact
on the economic growth and peace and stability
of the regional economies. India's soft-power
diplomacy reflected this during Prime Minister
Narendra Modi's consecutive visits to
Seychelles, Sri Lanka, and Mauritius in 2015 to
 Blue Economy: Beyond an Economic Proposition

strengthen economic ties by way of developing a
sustainable ocean economy. The Mauritius
Declaration 2015, passed during the first ever
blue economy conference of the Indian Ocean
Rim Association, marks progress towards
regional collaboration on sea-based economic
activities. The declaration calls for exploring
new and innovative opportunities for
investment in aquaculture, shipping, and ocean-
20
based industries.
CONCLUSION
Regional focus has turned towards the Indian
Ocean as the new frontier for sustainable
economic development, alongside concerns of
security issues. India should build on the
momentum it has created thus far and take on a
larger responsibility in developing and securing
the Indian Ocean by developing ideas, norms
and road maps for an inclusive and collaborative
ocean governance society. Developing a
normative framework for doing business and
harnessing the ocean's potential in a sustainable
manner is another area where India could
demonstrate leadership. This framework must
ensure a just and equitable environment for
seizing the business opportunities in the IOR.
India should start by creating robust
mechanisms for knowledge creation. For
instance, diverse platforms for interaction
between sectoral experts, professionals,
scientists, and the business community could be
envisaged. The existing and new multilateral
trading agreements should also be modified and
defined in a way that enables the creation of
sustainable infrastructure to meet the demands
of future economic activities.

ABOUT THE AUTHOR

Sonali Mittra is an Associate Fellow at the Observer Research Foundation, New Delhi. She is also
Academy Senior Fellow at Chatham House in London.

ENDNOTES:

1. United Nations. Blue Economy Concept Paper. (Rio de janeiro: United Nations, 2012).
2. Sustainable Development Knowledge Platform. Sustainable Development Goal 14 . Accessed December
2, 2016, https://sustainabledevelopment.un.org/sdg14.
3. See: ird International Cooperation on Small Island Developing States, Samoa 2014, 21st African Union
Summit 2013, Post-2015 Development Conference 2015, IOR's Blue Economy Conference 2015.
4. See: Ocean Policy Statement of 2002, the Indian Maritime Agenda 2010-2015, and the latest Ensuring
Secure Seas: Indian Maritime Security Strategy 2015.
5. Centre for Coastal Zone Management and Coastal Shelter Belt. Database on Coastal States of India .
Accessed December 2, 2016, http://iomenvis.nic.in/index2.aspx?slid=758&sublinkid=119
&langid=1&mid=1.
6. Ibid.
7. Planning Commission of India. Press Note on Poverty Estimates, 2011-12. (New-Delhi: Government of
India, 2013).
8. Labour Bureau, Ministry of Labour and Employment. Report on Fifth Annual Employment-
Unemployment Survey (2015-16). (Chandigarh: Government of India, 2016).

ORF ISSUE BRIEF No. 173 • MARCH 2017 5

 Blue Economy: Beyond an Economic Proposition

9. Ministry of Statistics and Programme Implementation. Indian States by GDP. Accessed December 5,
2016,http://statisticstimes.com/economy/gdp-of-indian-states.php.
10. Planning Commission. State-wise YoY Growth Rate by Industry of Origin (2004-05 Prices). Accessed
December 5, 2016, http://planningcommission.nic.in/data/datatable/data_2312/Databook
Dec2014%2085.pdf.
11. Senapati, Sibananda and Gupta, Vijaya. Climate change and coastal ecosystem in India: Issues in
perspectives. (New-Delhi: International Journal of Environmental Sciences, 2014).
12. Mohanty, S.K et al. Prospects of Blue Economy in the Indian Ocean. (New-Delhi: Researcj ad Information
System for Developing Countries). Accessed December 7, 2016, http://ris.org.in/pdf/
Final_Blue_Economy_Report_2015-Website.pdf.
13. Oceans Policy Science Advisory Group. Marine Nation 2025: Marine Science to Support Australia's Blue
Economy. (Sydney: Government of Australia, 2013).
14. Prime Minister's O ce . e Ocean Economy: A Roadmap for Mauritius. (Mauritius: Government of
Mauritius, 2013).
15. Zhao, Rui . e Role of the Ocean Industry in the Chinese National Economy: An Input-Output Analysis,
Centre for the Blue Economy.(Monterey: Monterey Institute of International Studies, 2013).
16. Centre for Coastal Zone Management and Coastal Shelter Belt. Database on Coastal States of India
Accessed December 2, 2016, http://iomenvis.nic.in/index2.aspx?slid=758&sublinkid=119
&langid=1&mid=1.
17. Press Information Bureau. Economic Survey 2015-16: Services Sector remains the Key Driver of
Economic Growth contributing almost 66.1% in 2015-16. Ministry of Finance. (New-Delhi: Government
of India, 2016).
18. Ministry of Shipping. Indian Maritime Agenda 2010-2020. (New-Delhi: Government of India, 2011).
19. Ministry of Road Transport and Highways. Indian Shipping Statistics 2015. (New-Delhi: Government of
India, 2016). Accessed December 7, 2016. http://shipping.nic.in/show le.php?lid=2280.
20. Indian Ocean Rim Association. Mauritius Declaration on Blue Economy. Accessed December 3, 2016,
http://www.iora.net/media/158070/mauritius_blue_economy_declaration.pdf.

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