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01 Nov 2017
"Shipbuilding Financial Assistance Policy: Shipping Ministry launches revamped software and updated guidelines to facilitate implementation "
Credit : TSO Bureau


"To promote Government of India’s ambitious ‘Make in India’ programme and to encourage domestic shipbuilding by providing a level playing field vis-a-vis foreign shipyards, the Government had approved the Shipbuilding Financial Assistance Policy for Indian Shipyards in December 2015. This policy provides Rs. 4000 Crores financial assistance to shipyards for 10 years for contracts secured between 01.04.2016 and 31.03.2026 (including these dates). The Shipyards Association of India had raised certain issues with regard to the previous web application which had been launched in June 2016 for processing applications for financial assistance under the policy. The Ministry of Shipping held a series of consultations with the stakeholders and has now rolled out an updated version of the web application, along with an amended set of guidelines, for applying under the policy. Under the amended guidelines, increased numbers of days are now available with the shipyards to apply under the policy, as well as to obtain and submit valuation reports. The updated web application also generates a wider choice of international valuers by whom the valuation of a vessel can be carried out. The upgraded version of the web application will be administered and monitored by the Directorate General of Shipping, Mumbai. 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."
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