Cabinet okays Rs 1,624 cr subsidy scheme to Indian shipping firms
New Delhi: The Union Cabinet on Wednesday approved a scheme to provide Rs 1,624 crore over five years as subsidy to Indian shipping companies in global tenders floated by ministries and CPSEs for import of government cargo, an official statement said.
According to the statement, registration shall be done online within 72 hours like the world's best ships registries and this will make it easy and attractive to register ships in India and thereby aid in boosting the Indian tonnage.
"In addition to this, it is intended to provide 30 days to any in-flagging vessel to replace the crew on board with Indian crew," it added.
In order to address the cost disadvantage suffered by Indian flag ships, Finance Minister Nirmala Sitharaman in her Union Budget for 2021-22 speech had announced a scheme providing Rs 1,624 crore over five years to promote flagging of merchant ships in India by providing subsidy support to Indian shipping companies in global tenders floated by ministries and central public sector enterprises (CPSEs).
The statement said steps are also being taken to rationalise the manning requirements on the ships by aligning them with international standards.
It further explained that for a ship which is flagged in India after February 1, 2021 and is less than 10 years at the time of flagging in India, the subsidy support would be extended at 15 per cent of the quote offered by the L1 foreign shipping company or the actual difference between the quote offered by the Indian flag vessel exercising Right of First Refusal (ROFR) and the quote offered by the L1 foreign shipping company, whichever is less.
According to the statement, for a ship which is flagged in India after February 1, 2021 and which is between 10 to 20 years old at the time of flagging in India, the subsidy support would be extended at 10 per cent of the quote offered by the L1 foreign shipping company or the actual difference between the quote offered by the Indian flag vessel exercising ROFR and the quote offered by the L1 foreign shipping company, whichever is less.
It said that the rate at which the above subsidy support is extended would be reduced by 1 per cent every year, till it falls to 10 per cent and 5 per cent, respectively, for the two categories of ships.
The statement pointed out that the provisions of this subsidy support would not be available in case where an Indian flagged vessel is the L1 bidder.
The budgetary support would be provided directly to the ministry/department concerned, it said.
