Ministry of Shipping recently announced the growth rate of Indian industries. The data released by the Ministry stated that the tonnages of vessels under the Indian flag saw an increase of 9.7 per cent from 11.55 MT to 12.68 MT between March 2017 and March 2020.
The gains were largely led by a few important government initiatives intended towards incentivising the shipping sector. These majors included a reduction in GST from 18 per cent to 5 per cent on bunker fuel used in Indian flag vessels, providing cargo support to the Indian shipping industry through the right of first refusal (RoFR), allowing shipping enterprises based in India to acquire ships abroad and flag them in the country of their convenience, bringing the parity in the tax structure of Indian seafarers, removal of licensing requirements for chartering of foreign-registered ships for encouraging coastal movement of agriculture and other commodities, fertilisers, EXIM-laden transshipment containers, and empty containers, etc.
The growth in tonnage carrying capacity is also expected to strengthen the shipbuilding sector. Ministry of Shipping in this month directed the major ports of India to procure tug boats from Indian made sources. These procurements under the ‘Make in India’ initiative, would promote shipbuilding in India. The ministry further proposed to set up a Standing Specifications Committee under managing directors of Indian Ports Association, comprising representatives from Cochin Ship Yard Limited (CSL), Shipping Corporation of India (SCI), Indian Register of Shipping (IRS), and Director General of Shipping.
Recently, Cochin Shipyard did a successful order booking for two automated vessels from Norwegian Government. These will be the first-of-its-kind unmanned vessels. Various decisions taken by Ministry of Shipping will turn around the shipbuilding sector in the near future.
Source: Dalat Street Investment Journal