Grant financial assistance to shipyards, after delivery of ship, to counter cost disadvantages @ 20% of the contract price or the fair price
The Union Cabinet chaired by the Prime Minister Narendra Modi has approved the proposal for introducing measures to encourage shipbuilding and ship repair industry in India under the 'Make in India' initiative.It includes a policy for grant of financial assistance to shipyards, after delivery of ship, to counter cost disadvantages @ 20% of the contract price or the fair price, whichever is lower; such assistance is to be reduced @ 3% every three years and will be given for all types of ships. This policy will be in force for ten years. The implementation of this policy would require budgetary support of Rs 4,000 crore over ten years. The proposals also include grant of a Right of First Refusal for Indian shipyards for government purchases; tax incentives and grant of infrastructure status for shipbuilding and ship repair industry.
The promotion of the shipbuilding and ship repair industry in India is important for the following reasons, namely: -
i. The shipbuilding industry has the same impact as infrastructure sector due to higher multiplier effect on investment and turnover (11.6 and 4.2) and high employment potential due to multiplier effect of 6.4.
ii. The shipbuilding industry is strategically important industry due to role in energy security and maritime defense and for developing heavy engineering industry.
The Policy will give a big boost to the shipbuilding and ship repair industry and will facilitate the 'Make in India' initiative of the Government of India.
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