Lok Sabha Question No. 2221 (UNSTARRED), answered on 2016-03-10
Subject: Ship Building Industry
Ministry: SHIPPING
Asked by: DIPSINH SHANKARSINH RATHOD, SHIVAJI ADHALRAO PATIL, ANANDRAO  ADSUL, DHARMENDRA YADAV, PRAHLAD SINGH PATEL, Shrirang Appa Barne

## GOVERNMENT OF INDIA MINISTRY OF SHIPPING

## LOK SABHA UNSTARRED QUESTION NO.2221 TO BE ANSWERED ON 10 TH  MARCH, 2016

## SHIP BUILDING INDUSTRY

## 2221. SHRI D.S. RATHOD:

SHRI ADHALRAO PATIL SHIVAJIRAO:

SHRI ANANDRAO ADSUL:

SHRI DHARMENDRA YADAV:

SHRI PRAHLAD SINGH PATEL:

SHRI SHRIRANG APPA BARNE:

Will the Minister of SHIPPING be pleased to state:

## पोतप�रवहनमंत्

- (a)  whether  the  ship-building  industry  is  strategically  important  industry  due  to  its  role  in  energy security and maritime defence and for developing heavy engineering industry;
- (b)if so, whether the ship-building industry is going through a global slump, and if so, the details thereof;
- (c) whether Indian shipyards are generally known for executing the orders of ship-building at a slow pace among world ship-fleet owners, if so, the reaction of the Govt. thereto;
- (d) whether the Government proposes to encourage ship-building industry, if so, the details thereof; and
- (e) the steps taken by the Government to promote/encourage the ship-building industry including the package approved by the Government in this regard?

## ANSWER

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

- (a) Yes Madam. On account of the positive spin-offs of the shipbuilding industry, ship-building industry  has  been  identified  as  one  of  the  four  key  sectors  of  strategic  importance  (in  addition  to Defence, Aero-space and Capital Goods) in the ' Manufacturing Plan - Strategies for Accelerating Growth of Manufacturing in India in the 12 th Five Year Plan and Beyond ' by the erstwhile Planning Commission and is part of the 'Make in India' initiative of the Government of India.
- (b) The global economic meltdown in 2008-09 affected EXIM trade adversely thereby creating a slump in the global shipping market which in turn resulted in fall in demand for new ships. Impacted by the global shipping/shipbuilding recession from 2008 onwards, there has been a declining trend in order book position of Indian shipyards.

(c) Cochin Shipyard Limited's (CSL) track record has been consistently satisfactory. CSL has exported  48  vessels  during  the  last  ten  years  to  international  ship  owners,  generally  on  time. However, even though Indian private sector shipyards initially executed some orders satisfactorily, subsequently, due to global economic meltdown, stress in financial conditions, foreign shipbuyers' reluctance  to  take  deliveries  of  vessels  from  Indian  shipbuilders  due  to  their  own  financial difficulties etc., deliveries of Indian private sector shipyards have got delayed.

(d)&(e):Government of India has approved the policy regarding Indian shipbuilding and ship-repair industry- A strategy for promoting 'Make in India' initiative, on 09.12.2015 including the proposals regarding  financial  assistance  policy  and  relaxation  of  domestic  eligibility  criteria.  Further,  the Institutional Mechanism  on  Infrastructure 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 shipyards. The attendant tax benefits would  enable  the  shipyards  to  reduce  their  cost  disadvantage  and  invest  in  capacity  expansion thereby  giving  a  boost  to  the  Indian  shipbuilding  industry.  Further,  Government  of  India  has extended exemptions to shipbuilding industry on raw materials and parts used in shipbuilding vide Notification Nos. 54/2015-Customs, 55/2015-Customs, 44/2015-Central Excise and 45/2015-Central Excise all dated November 24, 2015.

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