Lok Sabha Question No. 2081 (UNSTARRED), answered on 2016-03-10
Subject: Reform in Shipping Sector
Ministry: SHIPPING
Asked by: K. KAMARAAJ

## GOVERNMENT OF INDIA MINISTRY OF SHIPPING

## LOK SABHA UNSTARRED QUESTION NO.2081 TO BE ANSWERED ON 10 th  MARCH, 2016

## REFORM IN SHIPPING SECTOR

2081.     DR. K. KAMARAJ:

Will the Minister of SHIPPING be pleased to state:

## पोतप�रवहनमंत्

- (a) the details of policy adopted by the Government for reforms in the shipping sector and capacity enhancement of ports including Chennai port;
- (b)the share of the country in the global ship-building capacity and the steps taken by the Government to enhance the said capacity;
- (c)whether the Government has set up proposes to set up a regulatory authority for shipping industry and ports; and
- (d) if so, the details thereof?

## ANSWER

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

- (a) 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.

Major  ports  are  regularly  enhancing  their  capacity  by  means  of  mechanisation,  capital dredging, rail-road connectivity and capacity augmentation projects both through PPP mode and internal resources.  In 2015-16, 70.56 million ton capacity has been augmented in Major ports out of which Chennai Port's share is 5.00 million tons.

- (b) The Indian shipbuilding industry had a share of 1.24%% in 2007 in the global order book, which  has  shrunk  to  0.1%  in  2014.    To  counter  cost  disadvantage  vis-a-vis  imported  ships, Government  on  November  24,  2015  has  exempted  customs  and  central  excise  duties  on  inputs used in shipbuilding.  Government has recently decided to (i) extend financial assistance for Indian shipyards equal to 20% of the lower of the 'Contract Price' or the 'Fair Price' of each vessel built by  the  shipyards  for  a  period  of  at  least  ten  years  commencing  from  2015-16.  (ii)Revision  of domestic  eligibility  criteria  to  ensure  that  all  the  government  departments  or  governmental agencies such as CPSUs procuring vessels for governmental purposes or for own purposes shall undertake bulk tendering for their vessel related requirements with deliveries starting from 20172018 with a Right of First Refusal (RoFR) for Indian shipyards and shall ensure that from 2025 onwards,  only  Indian-built  vessels  are  procured  for  governmental  purpose  or  for  own  purpose. Further, The Institutional Mechanism on Infrastructure has recommended inclusion of shipyards as 'Infrastructure'

(c)&(d):The  Indian  shipping  and  ports  sector  already  has  regulatory  authority  in  the  form  of Directorate General of Shipping and Tariff Authority for Major Ports.