In a bid to promote the shipbuilding industry under the 'Make in India' initiative, the Cabinet today approved a proposal for financial assistance of 20 per cent for ships built in the country.
The implementation of the policy, which would be in force for 10 years, requires a budgetary support of Rs 4,000 crore.
The Union Cabinet chaired by Prime Minister Narendra Modi has approved the proposal for introducing measures to encourage shipbuilding and ship repair industry in India under the ambitious 'Make in India' programme, an official statement said.
"It includes a policy for grant of financial assistance to shipyards, after delivery of ship, to counter cost disadvantages at 20 per cent of the contract price or the fair price, whichever is lower; such assistance is to be reduced at 3 per cent every three years and will be given for all types of ships," the statement said.
This policy will be in force for ten years, it said, adding the implementation of this policy would require a budgetary support of Rs 4,000 crore during this period.
The proposal also includes 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 statement said the promotion of the shipbuilding and ship repair industry in India is important as it has "the same impact as the 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."
Besides, the shipbuilding industry is strategically important industry due to role in energy security and maritime defence and for developing heavy engineering industry, it said.
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," it added.
The shipbuilding industry was demanding financial assistance for long.
