Lok Sabha Question No. 1624 (UNSTARRED), answered on 2022-02-11
Subject: Flagging of Foreign Cargo Ships
Ministry: PORTS, SHIPPING AND WATERWAYS
Asked by: Mohanbhai Kalyanji Kundariya, Dipsinh Shankarsinh Rathod

## GOVERNMENT OF INDIA

## MINISTRY OF PORTS, SHIPPING  AND WATERWAYS

## LOK SABHA

## UNSTARRED QUESTION NO. 1624

ANSWERED ON 1110212022

## FLAGGING OF FOREIGN  CARGO SHIPS

- 1624, SHRI MOHANBHAI KALYANJI KUNDARIYA: SHRt DIPSINH SHANKARSINH  RATHOD:

Will  the Nlinister  of PORTS, SHIPPING AND WATEREWAYS  be pleased to state? Tf,{,  q}dqf{-{Ei  sfusdcrrf  {ff

- (a) whether the Government has invited ship owners from all over the world to flag their ships as'Government Cargo Transports' in lndia to avail benefits of  'Make in lndia' Policy;
- (c) whether  there is any possibility  of additional  investment  in lndian flagged ships  to boost their tonnage capacity, and

## ANSWER

## I\4INISTER  OF PORTS, SHIPPING  AND WATERWAYS (SHRI SARBANANDA SONOWAL)

- (a&b) Yes Sir. The Policy of the Government  is to  promote  flagging of ships in lndia lndian Shipping Sector is on a  path of steady groMh, and  promotion of investment by entities  eligible to register  the ships,  for increasing lndian  tonnage  has been a stated policy of the Government.  As per the existing  policy, 100% FDI is allowed in lndian Shipping. However the foreign entities can flag ships in lndia provided  they have set up an lndian Subsidiary.
- (c&d) Yes Sir, there is possibility of additional investment in lndian flagged ships to boost their tonnage capacity and details are mentioned below: -
- i. More than 90% of the lndian EXIM cargo is carried on foreign  flag vessels' There  are, therefore,  huge possibilities  of investment in lndian flag tonnage.
- ii. Government of lndia has approved  the Ship building Financial Assistance (SBFA) Policy for lndian Shipyards on  gth  December  2015 for grant of financial
- (b) if so, the details thereof;
- (d) if  so, the details thereof ?

assistance to lndian Shipyards for shipbuilding contracts signed between April 1, 20'16 to March 31  ,  2026. The above  policy caters  for domestic orders and export orders,  in accordance with the guidelines issued in this respect. The Shipyard is provided financial  assistance  upon delivery of the qualified  vessels. Under the SBFA policy,  Ministry of Shipping is providing financial  assistance of 20% ol contract  price, actual receipts, fair price (whichever is least) to lndian shipyards for contracts signed between 2016-2026 to promote  the lndian shipbuilding  industry. Under the policy,  the financial  assistance  extended would  be reduced  by 3% every three years.  This attracts  the companies  across  the globe to build their ships in lndian shipyards resulting in a lot investments happening  in the shipping sector.

iii. The Directorate  has issued a Circular vide DGS Circular  No. 02 of 2021 lor revised Right of First Refusal  (RoFR) hierarchy.  As this circular lndian built, lndian fagged & lndian  owned vessel will get the highest priority.  The next in hierarchy are Foreign  built, lndian fagged & lndian owned and lndian built, Foreign fagged & Foreign owned vessels.  This will promote demand of lndian built vessels as the lndian built vessels  will have the priority  in chartering and will also provide additional market  access and business support  to ships built in lndia.

iv. ln order  to promote  the objective  of Aatamnirbhar  Bharat,  the Government of lndia has on  '14.07.2021  approved a scheme to provide  Rs. 1624 crore over a period  of five years  as subsidy supports  to lndian Shipping  Companies in global tenders  floated by Ministries/DepartmenUCentral  Public Sector Enterprises  (CPSEs), for import  of Government Cargo.