India to Offer Multiple Incentives To Bolster Shipbuilding Industry

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Credit: famingjia inventor/ unsplash
  • India plans to offer cash subsidies, lower taxes and other incentives to bolster its shipbuilding industry.
  • It is a part of an effort to reduce the pain of high freight rates.
  • The plans include subsidies so that at least 50 new vessels can be built.

A 10 billion rupee ($123 million) maritime development fund is also likely to be established, they added, without providing further details.

Plan Unveiled

Finance Minister Nirmala Sitharaman is expected to announce the plans when she presents the annual budget for 2023/24 to parliament on Feb. 1, a senior government official with direct knowledge of discussions said.

Details are, however, subject to change as budget consultations are still going on, the official added. India has around 35 shipbuilding companies, including some state-owned firms. Its maritime freight industry consists of about 1,500 vessels with a gross tonnage capacity of around 13 million tonnes.

Rising Freight Rates

India’s exporters and importers paid nearly $100 billion in freight last year, almost double the amount three years ago, said FIEO director general Ajai Sahai, adding that both exports and imports had surged and freight rates had risen significantly. The Federation of Indian Export Organisations (FIEO) and the shipbuilding industry have sought the concessions.

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Source: BusinessStandard

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