Whalesbook
Shipping Subsidy Scheme Extended to FY31
New Delhi – India's Ministry of Ports, Shipping and Waterways has extended a subsidy scheme aimed at encouraging domestic companies to register their merchant ships. The program will now run for an additional five years, concluding in FY2030-31, signaling a strengthened commitment to growing India's maritime fleet and global shipping presence.
Key Details: Funding and Objectives
The scheme, part of the 'Atmanirbhar Bharat' initiative, was first approved by the Union Cabinet in July 2021 with an outlay of Rs 1,624 crore. Its main goal is to offer subsidies to Indian shipping firms bidding on global tenders for government cargo imports. Finance Minister Nirmala Sitharaman announced the initiative in her FY22 budget speech.
How the Subsidy Works: Rates and Rules
Financial support is based on the age and bidding competitiveness of Indian-flagged vessels. For ships registered after February 1, 2021, and under 10 years old at registration, a subsidy of 15% of the lowest foreign bid (L1) is offered. Alternatively, the subsidy covers the difference between the Indian vessel's bid and the L1 foreign quote, if the Indian bid uses its Right of First Refusal (ROFR), whichever amount is smaller. Existing Indian-flagged ships less than 10 years old as of February 1, 2021, receive a 10% subsidy. Vessels older than 20 years are not eligible for subsidies.
Future Support and Program Goals
The Ministry of Ports, Shipping and Waterways noted the scheme's expanded scope and may seek additional funding from the Department of Expenditure if needed. This extension aims to build a more competitive and robust Indian shipping sector.