The Indian government is considering granting “infrastructure status” to the entire shipping industry. This move aims to boost the sector and propel India into the top five global shipbuilding and ship-owning nations by 2047, reports Mint.
Improving Competitiveness
The Indian government is considering granting “infrastructure status” to the entire shipping sector. This move aims to boost domestic shipbuilding and increase Indian ownership in the global shipping industry.
Currently, India ranks 18th globally in terms of shipping tonnage. Granting infrastructure status to ships would provide significant benefits, including easier access to long-term, low-interest loans from commercial banks.
The Ministry of Ports, Shipping and Waterways has requested the Department of Economic Affairs to consider this proposal, and it is expected that the decision may be announced in the upcoming budget proposals.
This move could significantly enhance the competitiveness of the Indian shipping sector and contribute to the country’s economic growth.
Access to Funds
Granting “infrastructure status” to the Indian shipping sector could significantly boost the industry. This would provide Indian shipping companies access to long-term, low-cost funds from institutions like NaBFID and NIIF, facilitating ship acquisitions and improving operational cash flow.
Currently, the Ministry of Ports, Shipping, and Waterways has proposed including coastal shipping in the “harmonized list of Infrastructure” to unlock various benefits. However, industry stakeholders, like INSA’s CEO Anil Devli, advocate for extending this infrastructure status to the entire shipping sector to drive overall growth.
Mr. Devli emphasizes the need for government oversight to ensure that these funds are effectively utilized by Indian entrepreneurs for fleet expansion. He suggests a mechanism to monitor the allocation of funds and ensure they contribute to the growth of the Indian shipping industry.
Capital Subsidy
The Indian government is considering extending the Shipbuilding Financial Assistance Policy (SBFAP) beyond its current expiration date in March 2026, as part of the “Amrit Kaal Maritime Vision 2047.” This ambitious plan aims to significantly enhance India’s position in the global shipping sector.
Currently, India ranks low in global shipbuilding (22nd) and ship ownership (18th). The Vision 2047 sets ambitious goals: to become one of the top five global shipbuilders with an annual production capacity of 4.5 million Gross Tonnage per Annum (GTPA) and to increase its fleet size to 100 million GT, placing it among the top five ship-owning nations.
Granting “infrastructure status” to the entire shipping sector is a key component of this vision. This would provide Indian shipyards with access to long-term, low-cost funding, crucial for capital-intensive shipbuilding projects.
The government also recognizes the need for proactive measures to ensure that these funds are effectively utilized by Indian entrepreneurs for fleet expansion. This will involve close monitoring and potentially establishing specific mechanisms to guide the allocation of funds towards the growth of the Indian shipping industry.
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Source: The Mint
