Govt taking measures to promote domestic shipbuilding: Sonowal

New Delhi [India], July 26 : Union Minister of Ports, Shipping and Waterways, Sarbananda Sonowal, informed the Lok Sabha on Friday that the government is providing financial assistance of 30 per cent for vessels where the main propulsion is achieved using green fuels such as Methanol, Ammonia, or Hydrogen fuel cells.
Additionally, the minister noted that under the Shipbuilding Financial Assistance Policy (SBFAP) scheme, financial assistance of 20 per cent is being provided for vessels with electric propulsion or hybrid propulsion systems.
To boost indigenous shipbuilding with modern technologies and machinery, the Ministry has amended the SBFAP guidelines. This includes higher financial assistance for specialized vessels like wind farm installation vessels and sophisticated dredgers, exceeding the Rs 40 crore limit for non-specialized vessels.
The minister emphasized the government's efforts to promote indigenous shipbuilding, advising entities dealing with shipbuilding and ship-owning to adhere to the Government of India Public Procurement (Preference to Make in India) Order, 2017. According to this order, ships costing less than Rs 200 crore must be procured from Indian shipyards.
The Ministry of Ports, Shipping, and Waterways, via Gazette Notification No. 112 dated April 13, 2016, has granted infrastructure status to shipyards, defining them as facilities with the necessary capabilities for shipbuilding, repair, and breaking activities. This status enables Indian shipyards to access cheaper long-term capital, reduce cost disadvantages, and invest in capacity expansion, thereby boosting the Indian shipbuilding industry.
In November 2021, the government released Standard Tug Designs of five variants for Major Ports to procure tugs built in Indian shipyards.
Guidelines issued on May 19, 2016, outline the evaluation and awarding of tenders for new shipbuilding orders by government departments or agencies, including public sector undertakings. These guidelines grant qualified Indian shipyards the "Right of First Refusal," allowing them to match the lowest price offered by foreign shipyards, aiming to increase shipbuilding activities in Indian shipyards.
To further promote indigenous shipbuilding, the Ministry also revised the hierarchy of the Right of First Refusal (RoFR) on September 20, 2023. The revised hierarchy is as follows:
- Indian-built, Indian-flagged, and Indian-owned
- Indian-built, Indian-flagged, and Indian IFSCA-owned
- Foreign-built, Indian-flagged, and Indian owned
- Foreign-built, Indian-flagged, and Indian IFSCA-owned
- Indian-built, foreign-flagged, and foreign-owned
The ministry added that the SBFAP scheme provides Indian shipyards with a level playing field against foreign shipyards for domestic and international shipbuilding orders. This scheme, aimed at reviving and promoting the Indian shipbuilding industry, covers contracts signed from 2016 to 2026. Both public and private shipyards, such as Cochin Shipyard Ltd, Chowgule Shipyard, Mazagon Dock Shipbuilders, and Garden Reach Shipbuilders and Engineers, have secured several domestic and foreign orders, leveraging the financial assistance available through SBFAP.
Minister Sonowal also added that since the inception of the SBFAP scheme, 39 shipyards have procured a total of 313 vessel orders, including domestic and export orders, valued at approximately Rs 10,500 crore. These shipyards have received financial assistance totalling Rs 337 crore for delivering 135 vessels to domestic and international shipowners.