Luxury Yacht Import Under Ogl Likely

The government is finalising plans to allow import of luxury yatchs under the open general licence (OGL) scheme. A committee under the surface transport ministry has been set up to work out the customs tariffs on such imports.

The policy also applies to other small ships like cruising boats, tugs and fishing boats. This ends the anomaly regarding import of big and small ships that arose after the announcement of the Export-Import policy, 1997-2002.

At present, only the import of big ships like the cargo and passenger vessels are allowed under the OGL scheme which means that they are not required to obtain the approval of the ship acquisition committee of the government. But such an approval is mandatory for import of smaller ships which are outside the purview of OGL.

 

The World Trade Organisation agreement, of which India is a signatory, is against any ban on imports although it favours imposition of customs tariff to regulate the import so that it is not detrimental to the interest of the home industry.The Exim policy created confusion when ship imports were put on the restricted list. The policy documents said: Ships, trawlers, boats and other water transport crafts will not be permitted to be imported except against a licence or in accordance with a public notice issued on this behalf.

However, after a good deal of discussion between the ministries of commerce and surface transport, it has been settled that not only the big vessels but even the smaller vessels can be imported under the OGL provided the surface transport ministry works out a suitable import tariff structure taking into account the cost of production and the price of such vessels abroad vis-a-vis those built at the Indian yards.

This will meet two purposes: While India could still comply with the WTO import prescriptions, the Indian yards cannot complain of loss of business to foreign yards. This is because if the Indian yards are given a level playing field with their foreign counter-parts with the new import tariffs acting as a price equaliser, they can still be globally competitive if they are efficient.

Accordingly to sources, the ministry of surface transport has accordingly set up a committee to work out this tariff structure and submit its recommendations to the ministry by May end. The eight-member committee is headed by P R Govil, development advisor (shipping), ministry of the surface transport.

The recommendations will be sent to the commerce ministry for implementation. The result would be that all the 21 categories of ships, of which 11 categories comprising the big ships are under the OGL at present, would come under OGL.