Lok Sabha Question No. 2253 (UNSTARRED), answered on 2016-03-10
Subject: Infrastructure Status to Shipyard Industry
Ministry: SHIPPING
Asked by: RAJEEV SHANKARRAO SATAV, SUPRIYA SADANAND SULE, HEENA VIJAYKUMAR GAVIT, DHANANJAY BHIMRAO MAHADIK, T. RADHAKRISHNAN, VIJAYSINH MOHITE PATIL, A. ARUNMOZHITHEVAN

## GOVERNMENT OF INDIA MINISTRY OF SHIPPING

## LOK SABHA UNSTARRED QUESTION NO.2253 TO BE ANSWERED ON  10 th   MARCH, 2016

## INFRASTRUCTURE STATUS TO SHIPYARD INDUSTRY

## 2253. SHRI SATAV RAJEEV:

SHRIMATI SUPRIYA SULE:

DR. HEENA VIJAYKUMAR GAVIT:

SHRI DHANANJAY MAHADIK:

SHRI T. RADHAKRISHNAN:

SHRI MOHITE PATIL VIJAYSINH SHANKARRAO:

SHRI A. ARUNMOZHITHEVAN:

Will the Minister of SHIPPING be pleased to state:

## पोतप�रवहनमंत्

- (a) whether the Government proposes to grant infrastructure status to the shipyard industry;
- (b) if so, the details thereof and the purpose behind the move along with the benefits likely to accrue to shipyard industry therefrom;
- (c) whether  the  move  will  boost  the  Government's  Make  in  India  initiative  and  if  so,  the details thereof;
- (d) whether the Government proposes to make it mandatory for Indian Stateowned firms to give half of their freight business to local shippers to help rescue an industry battered by the global commodities downturn and if so, the details thereof;
- (e) the other steps taken by the Government to protect the ailing local shipping firms; and
- (f) the total number of persons employed in Shipyard Industry in the country at present?

## ANSWER

## MINISTER OF STATEIN THE MINISTRY OF SHIPPING (SHRI PON. RADHAKRISHNAN)

(a) to (c) Yes,  Madam.  The  Institutional  Mechanism  on  Infrastructure  of  the  Department  of Economic Affairs in its 10th meeting on December 21, 2015 has recommended inclusion of shipyards as 'infrastructure'. Infrastructure status would enable Indian shipyards to avail cheaper long-term source of capital  to  Indian  shipbuilding  and  ship  repair  industry.The  attendant  tax  benefits  would  enable  the shipyards to reduce their cost disadvantage and invest in capacity expansion. The shipyards would be able to avail flexible structuring of long term project loans, long term funding from infrastructure funds for longer  tenure  equivalent  to  the  economic  life  of  their  assets,  relaxed  ECB  norms,  issuance  of Infrastructure bonds for meeting working capital requirements as well as benefits under Income Tax Act, 1961.   This would boost the growth in this sector and the 'Make in India' initiatives.

(d)    A note was circulated by Ministry of Shipping which intended to increase Indian tonnage by relaxing such condition of FOB/FAS imports subject to a minimum of 50% of their annual requirement being met through long term charter contracts with Indian shipping companies.

(e) In order to make the Indian shipping industry attractive and more competitive, the Government has exempted Customs and Excise Duty leviable on bunker fuels used in Indian flag vessels for transportation of mix of EXIM, domestic and empty containers between two or more ports in India. Government has brought in  a  uniform  abatement  of  service  tax  for  transportation  of  goods  by  rail,  road  and  sea  vessels.  Indian shipping  industry  has  been  provided  cargo  support  through  Right  of  First  Refusal  (RoFR).  Besides  this  , Government has taken a policy decision to allow shipping enterprises based in India to acquire ships abroad and  also  flag  them  in  the  country  of  their  convenience.  As  a  step  towards  promoting  'Ease  of  Doing Business' methodology for computation of period of stay of seafarers in India has been redefined.

- (f)    Shipbuilding industry in India employ around 39770 people.

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