The Shipbuilding Financial Assistance Policy that entails financial assistance of 20 per cent for ships built in the country will be applicable to contracts signed between April 1 and March 31, 2016.
In a bid to promote the shipbuilding industry under the 'Make in India' initiative, the Cabinet in December last year had approved a proposal for financial assistance of 20 per cent for ships built in the country.
"The Shipbuilding Financial Assistance Policy shall be effective for shipbuilding contracts signed during the dates, April 1, 2016 to March 31, 2026, including the said dates," the Ministry of Shipping said in guidelines for implementing the policy.
The policy which would be in force for 10 years requires a budgetary support of Rs 4,000 crore.
An institutional mechanism has also been created within the Ministry for redressal of grievances arising out of matters related to the said 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 guidelines said.
"The quantum of financial assistance shall reduce by 3 per cent after every three years of the policy. This policy shall be in force for a period of 10 years from the date stipulated in the guidelines formulated by the government for the purpose," it added.
Under this policy, only those vessels which are constructed and delivered within a period of three years from the date of contract shall be eligible for availing financial assistance.
In case of specialised vessels, the competent authority may grant in-principle approval for construction and delivery of such vessels within a specific period even beyond the aforesaid three years, but not exceeding six years.
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.
Promotion of the shipbuilding and ship repair industry in India holds importance 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, the government has earlier said.
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.
