The decision taken by the Ministry of Shipping to implement Shipbuilding Financial Assistance Policy will give a big push to indigenisation and shipbuilding as part of the ‘Make in India’ program.
Experts express satisfaction over finalization of guidelines for implementation of the policy – a long pending demand of the industry. Almost 90 per cent of the Indian trade is handled by the vessels carrying foreign flags.
An institutional mechanism has been created within the ministry for redressal of grievances arising out of issues related to the implementation of the policy. The policy approved by the Union Cabinet in December last will provide financial assistance to Indian shipyards for shipbuilding contracts signed between April 1, 2016 and March 31, 2026.
Shot in arm
“The policy will give a shot in the arm to ‘Make in India’ program in the shipping industry. Hindustan Shipyard Ltd, which is now under the Ministry of Defence, should take up construction of bigger vessels with a capacity of 1,00,000 to 1,50,000 DWT capacity,” veteran stevedore Garuda Pattabhiramayya told The Hindu on Sunday.
He said Shipping Corporation of India, the largest Indian shipping company, should also reorient its strategy on increasing its fleet by acquiring ships built in the country. He said domestic shipyards should go for massive modernization to construct bulk carriers like Very Large Crude Vessels, Panamax and Cape size vessels.
“Our carriage of containers is not up to the mark. Incentives promised in the policy will go a long way for shipbuilding industry to go for capacity augmentation/diversification/modernization,” Mr. Pattabhiramayya remarked.
The buzz is there that the policy will motivate Reliance and Garden Reach Shipbuilders & Engineers (GRSE) to expedite their proposals to set up shipbuilding facilities at Rambilli, about 50 km from the city.
Academic coordinator of Indian Maritime University Bhavana Venkata Ramalingeswara Rao said there was bright scope to strengthen the Indian shipbuilding industry.
According to the policy, the financial assistance will be 20 per cent of the ‘contract price’ or the ‘fair price’ whichever is lower, as determined by international valuers for any vessel built in India subsequent to its delivery. The quantum of financial assistance shall reduce by 3 per cent after every three years of the policy.
The policy will be in force for 10 years from the date stipulated in the guidelines formulated by the government for the purpose. Under the policy, only those vessels which are constructed and delivered within a period of three years from the date of contract will be eligible for assistance.
Center decides to implement financial assistance policy as part of ‘Make in India’