Budget 2012 falls short of Shipping industry's expectations

The shipping industry, already in choppy waters, may have to wait longer for the tide to turn. Expectations of a modernization fund for easy access to low-cost borrowings and abolition of seafarer’s tax to retain talent were not met.

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A silver lining was abolition of 5% countervailing duty imposed on ships. Anil Devli, CEO, Indian National Shipowners Association, said, “This will end uncertainty for companies about bringing ships to Indian coast.”

Cut in withholding tax on interest payments of external commercial borrowings is also expected to help port developers and shipbuilders. But the hike in service tax has been a dampener.