Shipping cos to get Rs 1,624 cr as subsidy over 5 years

Cabinet okays scheme to provide Rs 1,624 cr over 5 years as subsidy to Indian shipping companies

In addition to this, it is intended to provide 30 days to any in-flagging vessel to replace the crew on board with Indian crew

Representative image. Credit: iStock Photo

The Centre on Wednesday approved a scheme to provide Rs 1,624 crore over five years as subsidy to Indian shipping companies in global tenders floated by ministries and Central Public Sector Enterprises for import of government cargo.

Registration shall be done online within 72 hours like the world's best ships registries and this will make it easy and attractive to register ships in India and thereby, aid in boosting the Indian tonnage, said a statement from the Shipping Ministry.

"In addition to this, it is intended to provide 30 days to any in-flagging vessel to replace the crew on board with Indian crew," it added.

The decision was taken in a cabinet meeting chaired by Prime Minister Narendra Modi.

Finance Minister Nirmala Sitharaman, in her Union Budget for 2021-22 speech, had announced a scheme providing Rs 1,624 crore over five years to promote flagging of merchant ships in India by providing subsidy support to Indian shipping companies in global tenders floated by ministries and CPSEs. This scheme was announced mainly to address the cost disadvantage suffered by Indian flag ships.

The scheme has immense potential to generate employment. It will also help to increase Indian fleet and will provide direct employment to Indian seafarers since Indian ships are required to employ only Indian seafarers.

Cadets who wish to become seafarers are required to obtain on-board training on ships. Indian ships will, therefore, provide training slots for young Indian cadets.

The increase in Indian fleet will also generate indirect employment in development of ancillary industries such as shipbuilding, ship repair, recruitment, banking, etc. and contribute to the Indian GDP, said the statement.