Massive Losses in Private Shipyards

Minister of State for Shipping, Shri Pon. Radhakrishnan has informed that there are about 19 Private Sector Shipyards in India and 8 Public Sector Shipyards. The Government of India has taken the following steps to encourage shipbuilding industry:

(i) To promote Indian shipyards, the Union Cabinet has on December 9, 2015 approved New Shipbuilding Financial Assistance policy for Indian shipyards for contracts signed during a ten year period, viz. 2016-2026. The Union Cabinet has also approved that all government departments or agencies including CPSUs have to provide Right of First Refusal to Indian shipyards while procuring or repairing vessels meant for governmental or own use till 2025 after which only Indian shipyards would build and repair vessels. These measures would improve the order book position of Indian shipyards.

(ii) The Institutional Mechanism on Infrastructure working under the Department of Economic Affairs, Government of India has, on December 21, 2015, recommended inclusion of stand-alone shipyards undertaking shipbuilding and ship-repair under the Harmonized List of Infrastructure sectors.

(iii) To provide a level playing field for the indigenously built ships vis-à-vis imported ships, the Government has on November 24, 2015 exempted Customs and Central Excise duty on inputs used in manufacture of ships and relaxed the limitation to operate shipyards under customs control in terms of Section 65 of the Customs Act, 1962.

(iv) To promote ease of doing business in the sector, in the Union Budget 2016-2017, Government has issued simplified procedure for tax compliance for the shipyards while procuring duty free goods for shipbuilding and ship repair.

(v) To bring down the cost of construction of barges, river sea vessels (RSV Types 1 & 2) and port and harbour crafts and to meet demand for steel by ship and barge builders, the Government has, on February 9, 2015, decided that re-rolled steel obtained from re-cycling yards/ship breaking units would be certified for use in construction of these vessels. The above mentioned measures would make Indian shipyards more competitive and help them in procuring more orders.

141 MOUs/Business agreements with an estimated investment of around Rs. 83,000 Crore were signed during the Maritime India Summit. These Memorandum of Understandings (MoUs)/Business Agreements relate to different segments of the maritime sector such as port modernisation, new port development, inland waterways, hinterland connectivity & multimodal logistics, coastal shipping, ship building and ship repair, port led industrialization, green initiatives in port, light house tourism and maritime education and training.