Post Date : June 12, 2021
A new policy, likely to be approved by the Union Cabinet soon, will provide a subsidy of more than INR 1,600 crore to the shipping companies that participate in global tenders floated by ministries and central public-sector enterprises.
This move will be aimed at encouraging ship owners and shipping companies to acquire vessels to participate in these tenders, and thereby increasing jobs in the maritime sector.
Announced in February this year, the policy is part of the fiscal 2022 Union Budget. “As of now, the policy is in the inter-ministerial consultation stage,” a senior government official as quoted by Economic Times. The official hinted that the policy might be taken up by the Cabinet this month.
Under this new policy, a new ship which is less than 10 years old on the date of flagging in India, will be provided with a subsidy support of 15% of the lowest quoted offer by a foreign flagged company in a tender. While for an old ship (10-20 yrs old) the subsidy will be 10%.
Once the scheme is launched, this rate will be reduced by 1% every year till it reaches 10% and 5%, respectively.
As of now, Indian-owned ships are estimated to carry only about 8% of India’s export-import trade. This new policy looks at increasing the market share of such ships in the global fleet. This, in turn, will also give a boost to the domestic shipbuilding and shipping industries while also encouraging the domestic shipping industry.