Indian Shipbuilding: The Progress
As of November 30, 2024, India’s shipping fleet includes 1,552 Indian-flagged vessels, amounting to 13.65 million gross tons. To enhance domestic shipbuilding, the government has introduced several initiatives. All in all, these aim to modernize the industry, fostering sustainable practices, and promoting indigenous manufacturing. Here are the key measures:
Key Government Initiatives
- Enhanced Financial Assistance: The government has amended the Shipbuilding Financial Assistance Policy (SBFAP). Now it will provide greater aid for constructing wind farm installation vessels and sophisticated dredgers. Specialized vessels can receive over INR40 crores, while green fuel-powered vessels (e.g., Methanol, Ammonia, Hydrogen) receive 30% assistance. Also, those with electric or hybrid propulsion systems receive 20%.
- Local Procurement Mandate: Under the Public Procurement (Preference to Make in India) Order, 2017, government bodies have limitations. They must procure ships costing less than INR200 crores from Indian shipyards, promoting indigenous shipbuilding.
- Infrastructure Status for Shipyards: The government granted the infrastructure status in April 2016. It enables Indian shipyards to access cheaper long-term capital, reducing costs and supporting capacity expansion.
- Standard Tug Designs: In November 2021, the government released five variants of standard tug designs. These were particularly for major ports, ensuring procurement from Indian shipyards.
- Tendering and Right of First Refusal (RoFR): Guidelines issued in May 2016 prioritize Indian shipyards in government tenders by granting them the RoFR. Consequently, this allows them to match foreign bids. The revised RoFR hierarchy in 2023 gives preference to Indian-built, flagged, and owned vessels.
- Atmanirbhar Bharat Scheme: Approved in 2021, this scheme allocates ₹1,624 crore in subsidies over five years, empowering Indian shipping companies in global tenders and bolstering domestic industry confidence.
- Green Tug Transition Programme (GTTP): Launched to reduce carbon emissions, this program promotes environmentally sustainable tugboat operations, integrating advanced technologies to enhance industry competitiveness.
- Harit Nauka Guidelines: Focused on inland vessels, these guidelines encourage the use of eco-friendly materials, energy-efficient designs, and sustainable practices, aligning with the vision of a greener shipping industry.
- Global Tendering Policy: The RoFR policy remains active for government departments and PSUs acquiring vessels through global tenders, further stimulating demand for Indian shipbuilding.
Conclusion
These strategic initiatives underscore the government’s commitment to bolstering the Indian shipbuilding sector, ensuring sustainable development, and fostering technological advancements. With these efforts, India aims to become a leading player in the global shipbuilding market.
Reference: Parliament Question: – Ship Building Industry
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