Lok Sabha Question No. 189 (STARRED), answered on 2019-07-04
Subject: Growth of Shipping Industry
Ministry: SHIPPING
Asked by: Supriya Sadanand Sule, Sunil Dattatray Tatkare

## GOVERNMENT  OF INDIA MINISTRY OF SHIPPING

## LOK SABHA STARRED  QUESTION  NO.  -.I89

TO BE ANSWERED  ON 4THJULY, 2019

## GROWTH OF SHIPPING  INDUSTRY

-189.  SHRIMATI  SUPRIYA SULE. SHRI  SUNIL DATTATRAY  TATKARE:

Will  the Minister  of SHtpplNG  be pleased  to state:

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- (a) the growth  registered  by the domestic shipping industry in the country during each of the rasl three years arong with the pre-sent  status of the ship-buirding industry in the country;
- (b) whether  the Government  has any specific  schemes for imp,roving  the overall infrastructure  in various shipyards  of the country and if so, the detairs  thereof;
- (c) the initiatives taken/being  taken by the Government  for upgradation of infrastructure  in the ports  and augmentation  of rndian tonnage in the shipping industry;
- (d) whether  many rndian shipping  companies  are heaviry in debt during recent years  and if so, the details  thereof along  with the remedial  ,"".rrJ" O"rg taken  by the Government  in this regard;  and
- (e) the other steps taken by the Government  to boost the growth  of the shipping industry in the country?

## ANSWER

MINISTER OF STATE(INDEPENDENT  CHARGE) FOR SHIPPING (SHRI  MANSUKH MANDAVIYA)

- (a) to (e) A statement  is laid on the Table of the House.

## STATEMENT WITH REFERENCE TO PART (a) TO (e) OF THE STARRED QUESTION NO. 189 TO BE ANSWERED  ON 04.07.2019  REGARDING  'GROWTH OF SHIPPING INDUSTRY' RAISED BY SHRIMATT  SUPRIYA  SULE AND SHRI SUNIL DATTATRAY TATKARE, HON'BLE MEMBERS OF PARLIAMENT

- (a) The growth  registered  by the Domestic  Shipping  industry in the country during each of the last three years is as follows:

## Growth of lndian tonnage.

| Years (As on 31't March)   | No. of Vessels   | Gross Tonnage (GT)   |   oh of increase |
|----------------------------|------------------|----------------------|------------------|
| 2016-17                    | '1316            | 1 15,61,608          |              6.5 |
| 2017-18                    | 1384             | 125,81,592           |              8.8 |
| 2018-19                    | 1407             | 127,99,913           |             16   |

Source DG(Shipping)

lndia has 28 shipyards out of which 20 shipyards are in the private sector ald  g  shipyards are in the public  sector. As per the Shipyards Association of lndia, out of these 20 private owned shipyards, seven are currently  non-functional.  Out of the remaining  Bpublic sector Shipyards, 2 Shipyards are under Ministry of Shipping, 4shipyards are under Ministry of Defence,  and 2 shipyards are under the State Government.

Ship building lndustry in lndia is in general in development  stage. lndia's share in global shipbuilding  industry  is less than 1%. The industry  is facing  a lot of competition  from international  shipbuilding yards located in Japan, South Korea, and China.  The lndian shipbuilding  lndustry  is facing acute financial  stress as a result of the on-going global recession in the international  shipping and shipbuilding industry  and the lack of worl<ing capital support from lenders. ABG Shipyard and Bharati Defence  & lnfrastructure have gone into liquidation, under the NCLT Procedure.

- Government  of lndia has, on April 13, 2016, notified inclusion of stand-alone  shipyards undertaking  activities such as Shipbuilding  and Ship-repair under the HarmonizerJ  list of lnfrastructure  Sectors.  This would  enable  availability  of cheaper  Long-Term  loans to shipyards. The government  also has a scheme for providing  financial assistance  for shipbuilding  Under this scheme, Rs.4000  crore assistance has been approved between 1-04-2016  and 31-032026' Financial assistance  is provided  @20%  to lndian shipyards.  This rate will be reduced by 3% every three year. (b)
- Expansion and modernization  of Major  ports  in the country is an on-going  p,pe6sss  to keep the ports  abreast  with new technologies  and also to meet cargo  traffic requirements. The process, (c)

inter-alia  involves construction of new berths and terminals, mechanization of existing  berths and terminals,  capital dredging  for deepening  of drafts for attracting large vessels  in port channels, development  of road and rail connectivity  etc. ln order to make the shipping industry more attractive and competitive,  the Government  has reduced GST from 19o/o lo Sok on bunker fuel used in lndian flag vessels. lndian shipping  industry has been provided cargo support through Right of First Refusal (RoFR).Shipping  enterprises based in India have been allowed to acquire ships abroad and flag them in the country of their convenience.  Parity has been brought in the tax regime  of lndian seafarers  employed  on lndian  flag ships vis-d-vis those on foreign flag ships. Licensing requirement  has been removed for chartering of foreign registered  ships by citizens  of lndia, companies  incorporated  in lndia and Registered  Societies,  to encourage coastal movement  of agriculture  and other commodities,  fertilizer, EXIM Transshipment Containers and Empty containers.

- (d) Shipping  is a highly capital-intensive  industry.  The shipping industry has seen a down turn in business  since 2008 due to global  recessionary  trends and over capacity. The freight rates have been low over a long period of time due to demand and supply mismatch and the tonnage exceeding the demand.  There have been instances of bankruptcies  of international  ship owners and the lndian industry is also struggling to cope with the worldwide  downturn. ln order to support  the lndian shipping industry and to make  it internationally competitive,  the Government  has allowed 100% Foreign Direct lnvestment (FDl) in the shipping sector, acquisition of all types of ships through import has been brought under the Open General Lrcense,  lndian shipping industry has been provided  cargo support in the form of right of first refusal,  and policy of Free On Board (FOB) import is being followed for government owned/controlled cargoes.
- (e) To promote  coastal shipping in lndia, Cabotage  has also been relaxed under section 407 of the Merchant Shipping Act, 1958 for specialized  vessels  such as RO-RO,  Ro-PAX, Hybrid Ro-Ro, Pure Car carriers, Pure Car and Truck carriers, LNG vessels and Over-Dimensional  cargo or Project  cargo carners  for 5 years  with effect from 2nd Sept.,  2015.subsequently,  with effect from 21May,2018, cabotage  has been relaxed for costal movement of EXIM transshipment containers and empty containers, with effect from 22 May,20'18, cabotage has been relaxed for costal movement of agriculture, horticulture,  fisheries and animal husbandry commodities and with effect from 22 June,2018, cabotage has been relaxed for fertilizers. The Government has also taken a number of steps to boost cruise  shipping in lndia.