The union cabinet has cleared a scheme for the shipping industry that will allow ships that are registered in India to obtain a 10% subsidy when they bid for cargo that is being imported by public sector undertakings enabling them to be competitive against foreign-registered ships who bid for the same cargo.
As per the scheme, the government of India (GoI) will discount a bid by an India-registered ship by 10% in order to make it more competitive against a bid from a foreign-registered ship for transporting the same cargo, provided the bid by the Indian-registered ship is not already the lowest.
GoI will fulfil the differential amount.
The scheme is planned for a period of five years providing total incentives of Rs. 1500 crore to the shipping industry.
“The Indian shipping industry has had structural issues including taxes and duties which applied only to Indian-registered ships. This caused competitive disability. The scheme makes operating India-registered ships attractive and competitive”, said Anil Devli, chief executive officer, Indian National Shipowners Association (INSA).
Industry experts pointed that the scheme will have multiple benefits for Indian shipping companies that operate ships registered locally including creation of employment opportunities for Indian seafarers and enhancement of investor interest in the domestic shipping sector.