As India’s ambitions for regional leadership in the Indo-Pacific grow, its maritime strategy is being scrutinised. Central to this debate is the proposed construction of a third aircraft carrier, a project projected to cost Rs 40,000–50,000 crore.
While critics view the initiative as a costly indulgence, proponents argue it is not merely a defence requirement but a long-term economic stimulus. A third carrier could represent a strategic and economic imperative for a nation seeking to bolster its industrial capacity, enhance its global standing, and secure vital trade routes.
Economic Boost Through Shipbuilding
India’s shipbuilding industry has long been an underutilised asset. The construction of the INS Vikrant, India’s first indigenously built aircraft carrier, demonstrated its transformative potential. The project catalysed regional development and skill enhancement in coastal areas by engaging over 500 micro, small, and medium enterprises (MSMEs) and creating 14,000 direct and indirect jobs.
The proposed Indigenous Aircraft Carrier-2 (IAC-2) could amplify these benefits. Shipbuilding projects in India have one of the highest economic multipliers, with every Rs 1 invested generating an additional Rs 1.82 in economic activity. Beyond direct employment, ancillary industries such as steel, electronics, and engineering would see significant demand, boosting their growth and aligning with India’s broader “Make in India” objectives.
Cochin Shipyard Limited (CSL), the epicentre of India’s aircraft carrier construction, stands to gain immensely. Building the IAC-2 would ensure that expertise developed during the Vikrant project is not lost, avoiding the costly erosion of skills witnessed during a hiatus in submarine production at Mazagaon Dock in the 1990s.
Infrastructure and Regional Development
Large-scale naval projects drive infrastructure upgrades, particularly in regions surrounding major shipyards and naval bases. During the construction of the Queen Elizabeth-class carriers in the UK, ports and docks underwent substantial modernisation, boosting local economies. A similar trajectory is expected in India.
Developing the IAC-2 would necessitate investments in berthing facilities, dredging, and logistical hubs, particularly in cities like Kochi or Visakhapatnam. These enhancements would support defence activities and bolster India’s commercial maritime infrastructure, a critical component of the Sagarmala Initiative aimed at port-led economic development.
Job Creation and Skill Development
The third carrier’s construction is poised to generate substantial employment directly and indirectly. It is estimated that such a project could create over 15,000 jobs, from shipyard workers to engineers and project managers. The demand for specialised training would also drive the establishment of new educational programs and partnerships with institutions like the Indian Maritime University.
Furthermore, the skills developed through carrier construction have broader applications. Advanced technologies like Electromagnetic Aircraft Launch Systems (EMALS) and unmanned aerial systems (UAS) would enhance India’s technological ecosystem, fostering innovation and creating spillover benefits for industries such as aerospace and robotics.
Export Opportunities and Global Positioning
Joining the elite club of nations capable of building aircraft carriers positions India as a significant player in the global defence market. While only seven nations currently construct carriers, several others operate them, often struggling with maintenance and refits.
India’s growing expertise in carrier construction could enable it to tap into this niche market, offering maintenance services or exporting smaller platforms to friendly nations. Such ventures would align with India’s goal of achieving $5 billion in annual defence exports by 2025, providing a steady revenue stream and enhancing its geopolitical influence.
Safeguarding Trade Routes and Economic Security
The economic rationale for a third carrier extends to India’s maritime trade security. With 95% of trade by volume and 70% by value conducted via sea routes, ensuring the safety of shipping lanes is critical. A robust carrier fleet would allow India to project power and deter threats, from piracy to state-sponsored aggression.
Furthermore, as China expands its naval footprint in the Indian Ocean through projects like the Fujian aircraft carrier, India must counterbalance this influence to secure its trade lifelines. The economic stakes are high, as any disruption to these routes could have cascading effects on India’s economy.
Addressing Cost Concerns
Critics of the project point to its hefty price tag and competing defence priorities, including modernising the Army and Air Force. However, strategic public-private partnerships could help mitigate costs while increasing efficiency. The long-term benefits—job creation, industrial growth, and enhanced trade security—justify the initial investment.
A Strategic and Economic Necessity
The debate over India’s third aircraft carrier is not merely about military capabilities but also about economic opportunity. By driving industrial growth, creating jobs, and safeguarding trade, the IAC-2 could serve as both a catalyst for national development and a symbol of India’s maritime aspirations.
As India seeks to establish itself as a global power, investments like the third carrier are essential. They ensure the country’s security, economic resilience, and leadership in the Indo-Pacific. The carrier is more than a naval asset—it is a strategic investment in India’s future.