Companies can avail all shipbuilding sops simultaneously
The government has approved a ₹70,000 crore package for shipping and maritime sectors. Companies can now avail incentives under all schemes simultaneously. The package includes a National Shipbuilding Mission and a Maritime Development Fund. The a...
A day after the cabinet approved a ₹70,000 crore package for the shipping and maritime sectors, the government Thursday said companies will be able to avail incentives under all the schemes simultaneously.
In an interview to ET, shipping secretary T K Ramachandran said the package with three schemes has potential to create entire value chains.
He said the centre will approach global shipbuilding giants to set shop in the country with interest already being expressed by companies from Japan and South Korea.
"Guidelines for implementing schemes under the National Shipbuilding Mission are being prepared," Ramachandran said, adding that locations in different states will be evaluated for shipbuilding clusters from these sops.
In addition, the Maritime Development Fund (MDF) has been approved with a corpus of ₹25,000 crore to provide long-term financing for the sector. The Shipbuilding Development Scheme (SbDS), aimed at establishing shipyards in the country through a ₹19,989 crore budgetary outlay, also got the nod. Ramachandran said supply and demand side issues have been addressed in scheme design. "Demand aggregation, assurance and visibility will be ensured," he added.Tuticorin (Tamil Nadu), Dugarajapatnam (Andhra Pradesh), Porbandar, Kutch, and Bhavnagar (Gujarat), Dighi, Nandgaon (Maharashtra), and Kendrapara (Odisha) are said to being evaluated for shipbuilding clusters.
"Every shipbuilding cluster will be governed through a special purpose vehicle with central and state equity participation. They are responsible for connectivity infrastructure creation such as roads and making land available for the shipyards," he said, adding that these incentives will ensure facilities at the pre-shipyard stage are made available to create a favourable ecosystem.
Ramachandran said there is interest from global shipping lines in the ship-breaking credit note scheme. "India now has a Hong Kong Convention (HKC) compliant ship recycling industry," he said adding the credit note scheme is generating significant interest from global players that want to scrap their old ships in India and proceed to procure from domestic shipyards.
The ship-breaking credit note offers 40% of the vessel scrap value when scrapped in an Indian yard. This is reimbursable against the cost of constructing a new vessel in an Indian shipyard. The notes will be stackable, transferable and valid for three years.
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The National Shipbuilding Mission has also significantly boosted the ongoing Shipbuilding Financial Assistance Scheme, scaling up the allocation to ₹24,736 crore and extending it to March 2036, beyond the earlier 2026 deadline.
"The new scheme gives long term visibility of incentives for those making ships in India," Ramachandran added.
