India plans to be among the world’s top ten shipbuilding countries by 2030 and the world’s fifth largest shipbuilding power by 2047. However, as India vows to promote the “rise of shipbuilding”, the country’s much-anticipated Ship Building Financial Assistance Policy 2.0 is likely to reduce its support.
According to Indian media reports, India’s long-awaited Ship Building Financial Assistance Policy 2.0 may provide lower aid to different ship types than the Ministry of Ports, Shipping and Waterways previously proposed. The reason is that the Indian Ministry of Finance has proposed to reduce the proportion of financial assistance to the shipbuilding industry, which is expected to have an impact on Indian shipyards, making them face greater competitive pressure in the competition for orders with global shipyards.
According to the Ship Building Financial Assistance Policy 2.0 proposed by the Ministry of Ports, Shipping and Waterways of India, Indian shipyards can receive 20% financial assistance for building ordinary ships; 25% financial assistance for building more complex ship types such as tankers, container ships, chemical tankers and gas tankers; and an additional 30% assistance for building green ships and other ships using future technologies.
The policy, which is scheduled to last until March 2035 and could be extended to 2047, is intended to provide Indian shipyards with “long-term visibility” when taking orders, with aid amounts for different ship types remaining unchanged during the policy’s implementation period.
However, India’s Ministry of Finance has reportedly advocated reducing the amount of financial assistance to shipyards, with all types of ships seeing a 5% reduction: ordinary ships to 15%; tankers, container ships, chemical tankers, gas carriers, and other types of ships to 20%; and green ships to 25%.
Indian media reported that the revised Ship Building Financial Assistance Policy 2.0 was evaluated by the Expenditure Finance Committee (EFC) under the Indian Ministry of Finance in March this year. Based on this, the Indian Ministry of Ports, Shipping and Waterways has prepared a memorandum for consideration by the federal cabinet.
Currently, India has formulated an ambitious “shipbuilding rise” plan. Indian Prime Minister Modi previously announced that India plans to become one of the world’s top ten shipbuilding countries by 2030 and the world’s fifth largest shipbuilding power by 2047. To achieve this goal, India is formulating long-term strategies and providing various incentives to promote the development of the shipbuilding industry.
At a time when Indian shipyards are following the government’s footsteps and actively expanding production capacity and improving efficiency, the Indian Ministry of Finance’s proposal for Ship Building Financial Assistance Policy 2.0 will undoubtedly dampen the enthusiasm of local shipyards.