The proposal for introducing measures to encourage shipbuilding and ship repair industry in India under the 'Make in India' initiative got the approval of the Union Cabinet.
The proposal includes a policy for grant of financial assistance to shipyards, after delivery of ship, to counter cost disadvantages at 20% of the contract price or the fair price, whichever is lower; such assistance is to be reduced at 3% every three years and will be given for all types of ships.
The policy, which will be in force for 10 years, will require a budgetary support of Rs. 4,000 crore over 10 years.
The proposals also included a 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.
The promotion of the shipbuilding and ship repair industry in India is important as the shipbuilding industry has the same impact as 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.
Further, the shipbuilding industry is strategically important due to role in energy security, maritime defence and for developing heavy engineering industry.
