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Extend shipbuilding aid for 10 years beyond 2026 : Maritime AmritKaal Vision

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NEW DELHI : A state aid offered by the government to local shipbuilders for a ten-year period that ends in March 2026 is set to be extended with the Maritime AmritKaal Vision 2047 unveiled by Prime Minister Shri Narendra Modi at the Global Maritime India Summit in October recommending continuation of the financial assistance for as much as ten years.

The financial assistance to shipbuilders, both state-owned and private, is valid for a ten-year period beginning 1 April 2016, scaling down the quantum of aid by three percentage points every three years, starting with 20 percent during the first three years, 17 percent for the next three years, 14 percent for the next three years and 11 percent in the tenth year.

The aid was capped at Rs 40 crore for building a standard (non-specialised) ship within three years from the date of contract, according to the norms framed by the Ministry of Ports, Shipping, and Waterways to implement the shipbuilding financial assistance scheme.

“The current incentives seem to have had a limited impact on attracting tonnage to the Indian flag,” the vision document observed, noting further that the COVID-19 pandemic disrupted almost every area of the shipping industry with yard closures, logistical challenges and other delays.

India currently has less than 1 percent share of the global shipbuilding market, which is dominated by China, South Korea and Japan.

Indian shipyards face stiff competition in the domestic market in the absence of “protection ” against foreign shipyards through tariff barriers. As a result, Indian shipyards are outbid by foreign shipyards in the domestic and global markets with the cost disadvantage pegged as high as 35 percent.

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