Lok Sabha Question No. 2166 (UNSTARRED), answered on 2023-12-15
Subject: Indigenous Ship Building Industry
Ministry: PORTS, SHIPPING AND WATERWAYS
Asked by: Vishnu Dutt Sharma

## GOVERNMENT OF INDIA MINISTRY OF PORTS, SHIPPING AND WATERWAYS

## LOK SABHA UNSTARRED QUESTION NO. 2166

ANSWERED ON 15.12.2023

## INDIGENOUS SHIP BUILDING INDUSTRY

## 2166.  Shri VISHNU DATT SHARMA:

Will the Minister of PORTS, SHIPPING AND WATERWAYS be pleased to state:

## पȅन , पोतपįरवहनऔरजलमागŊमंũी

- (a) whether efforts are being made for development of indigenous shipbuilding industry;
- (b) if so, the details thereof; and
- (c) if not, the reasons therefor?

## ANSWER

## MINISTER OF PORTS, SHIPPING AND WATERWAYS (SHRI SARBANANDA SONOWAL)

(a)to  (c):  Yes,  sir.  The  following  efforts  have  been  made  by  the  Government  for development of indigenous ship building industry in the country:

(i) To promote indigenous shipbuilding industry in India, Ministry of Ports, Shipping and Waterways has brought in Shipbuilding Financial Assistance Policy (SBFAP) scheme for  Indian  shipyards to  procure orders from domestic as well as international markets and to  be  competitive  in  international  market  for  securing  global  orders.  The  scheme offers financial assistance to Indian Shipyards for shipbuilding contracts signed between April 1, 2016 and March 31, 2026 with rate of financial assistance starting from 20% in 2016 and diminishing to 11% in 2026.

(ii)  To  increase  indigenous  shipbuilding  with  regard  to  modern  technologies  and machinery, the Ministry has amended the SBFAP guidelines to include

- a)  Wind  farm  installation  vessels  and  construction  of  sophisticated  dredgers  as specialized vessels which are eligible to get higher financial assistance,
- b)  Financial  assistance  of  30% for vessels  where  main propulsion  is  achieved  by means of green fuels such as Methanol/ Ammonia / Hydrogen fuel cells,
- c)  Financial  assistance  of  20%  for  vessels  with  electric  means  of  propulsion  or vessels fitted with hybrid propulsion system.

(iii)  To  promote  indigenous  shipbuilding,  the Government  entities  dealing  with  ship building and ship-owning are advised to ensure local content as per the Government of India Public Procurement (Preference to Make in India) Order, 2017. As per this Order, procurement of ships of less than ₹200 crore is required to be from Indian shipyards.

- (iv) The government has also granted infrastructure status to the shipbuilding industry, which enables shipbuilding firms to avail flexible structuring of long-term project loans at lower rates of interest for longer tenure equivalent to the economic life of their assets. They also enables to issue infrastructure bonds for meeting working capital requirements and get tax benefits to increase shipbuilding activities.
- (v).The  government  has  released  Standard  Tug  Designs  of  five  variants  for  use  by Major ports for procurement of tugs to be built in Indian Shipyards
- (vi)  Government  has  issued  guidelines  for  evaluating  and  awarding  tenders  for  new shipbuilding  orders  floated  by  government  departments  or  agencies  including  public sector undertakings for acquisition of any  type of vessel(s) used  by  them  for Governmental  purposes  or  for  their  own  use.  Whenever  acquisition  of  a  vessel(s)  is undertaken through tendering route, the qualified Indian Shipyards will have a 'Right of first refusal' to enable them to match the evaluated lowest price offered by the foreign shipyard which is aimed to increase ship building activities in Indian shipyards.

(vii) To promote indigenous shipbuilding, the Ministry of Ports, shipping and Waterways has revised the hierarchy of Right of First Refusal (RoFR) to be followed for all kind of tender. The revised hierarchy of RoFR is:

- (1) Indian built, Indian flagged and Indian owned.
- (2) Indian built, Indian flagged and Indian IFSCA owned
- (3) Foreign built, Indian flagged and Indian owned,
- (4) Foreign built, Indian flagged and Indian IFSCA owned,
- (5) Indian built, foreign flagged and foreign owned

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