Indian ship owners gain access to foreign funds

Chennai: Shipping enterprises based in India have been permitted to acquire ships abroad and also flag them in the country of their convenience. This policy of “Indian Controlled Tonnage (ICT)” has facilitated Indian shipowners to gain access to cheaper funds abroad and also save on costs of setting up subsidiaries abroad to acquire and maintain such tonnage, says Union Minister of State for Shipping and Road Transport and Highways Pon Radhakrishnan.

This follows the Centre’s initiative of approving the Merchant Shipping Bill last year aiming to simplify the law governing the merchant shipping in the country. As part of a measure to strengthen the shipping and ports sector and make it internationally competitive, Modi-led government exempted the customs and excise duty leviable on bunker fuels used in Indian flag vessels for the transportation of a mix of EXIM, domestic and empty containers between two or more ports in India.

Further, to promote the manufacture of seagoing vessels by Indian shipyards, the Shipbuilding Financial Assistance Policy was approved for contracts signed during a ten year period, viz. 2016-2026. 

Customs and Central Excise duty exemption on inputs used in the manufacture of ships to provide a level playing field between indigenously built ships vis-à-vis imported ships and abatement of service tax of 70% for transportation by Coastal shipping and Inland Waterway transportation were among the measures that were initiated to strengthen the shipping and ports sector.

On the ambitious Sagarmala programme, the minister said 58 projects with a project cost of about Rs 28,767 crore have been approved.