Concerned over India's declining market share in global shipbuilding that currently stands at a meagre 0.01%, the Shipping Ministry has sought immediate policy measures including revival of subsidy scheme for shipbuilders.
"China, Korea and Japan have emerged as leaders and Taiwan, Vietnam and Brazil are entering the market...The (Indian) industry is at such a stage today that it needs support in the form of shipbuilding subsidy as well as other measures," Shipping Ministry has said as per an official document.
The ministry has argued that ever since the subsidy scheme has expired, India's share is declining and has come down to 0.01% from 1.24%.
"The Shipbuilding subsidy scheme 2002-07 increased India's share of world order from 0.02% in 2002 to 1.24% in 2007 but after the expiry of subsidy scheme it came down to 0.01%...The is the right time to invest since market is at a low level presently and a boom is expected in the next 2-3 years," it argued.
As per the new Maritime Agenda 2020 of Ministry of Shipping, the government has set a target to increase India's share in global ship building to 5%, to grab 10% share in world ship repair and generate 2.5 million additional jobs.
Apart from asking for direct fiscal support through provision of subsidy initially for five years, the ministry has also sought indirect support through exemption of import duty for capital equipment, withdrawal of excise duty on vessels sold in domestic tariff are and service tax exemption for the industry.
Besides, it also seeks "treating steel supply from domestic companies to Indian shipyards as deemed exports and other policy measures like granting infrastructure status for shipbuilding and preference for Indian built flag vessels."
The subsidy scheme was introduced to help the shipbuilding industry, and was given five-year extensions until it lapsed on August 14, 2007.
The scheme offered shipbuilders a 30% subsidy on the cost of building ocean-going merchant vessels that were more than 80-metres long, if they were built for the domestic market.
For export orders, ships of all types and capacities were eligible for the subsidy scheme. As per the scheme, while public sector yards were given the subsidy in installments, private shipyards could receive it after the vessel was delivered to the buyer.