{"id":118848,"date":"2021-07-15T20:21:15","date_gmt":"2021-07-15T14:51:15","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=118848"},"modified":"2021-07-15T20:21:50","modified_gmt":"2021-07-15T14:51:50","slug":"subsidy-scheme-for-shipping-firms-approved","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/subsidy-scheme-for-shipping-firms-approved\/","title":{"rendered":"Subsidy scheme for shipping firms approved"},"content":{"rendered":"<p><b>Source:\u00a0<\/b><b><a href=\"https:\/\/epaper.thehindu.com\/Home\/ShareArticle?OrgId=GFN8P3TRS.1&amp;imageview=0\" target=\"_blank\" rel=\"noopener\">The Hindu<\/a> and <a href=\"https:\/\/www.pib.gov.in\/PressReleasePage.aspx?PRID=1735384\" target=\"_blank\" rel=\"noopener\">PIB<\/a><\/b><\/p>\n<p><strong>Relevance<\/strong>: The article highlights one of the challenges with Indian shipping industry and the new government scheme to tackle it.<\/p>\n<\/div>\n<h5><strong>Synopsis:<\/strong><\/h5>\n<p>Cabinet has recently approved a scheme for the promotion of merchant ships in India by providing subsidy support to Indian shipping companies in global tenders floated by Ministries and CPSEs.<\/p>\n<h5><b>Challenges with the Indian Shipping industry at present:<\/b><\/h5>\n<ul>\n<li>Despite having a policy of 100% FDI in shipping since 1997, the Indian shipping industry and <strong>India&#8217;s national fleet are proportionately small<\/strong> when compared with their global counterparts.<\/li>\n<li>Currently, the Indian fleet comprises a <strong>meager 1.2% of the world fleet<\/strong> in terms of capacity. The <strong>share of Indian ships in the carriage of India&#8217;s EXIM trade has drastically declined from 40.7% in 1987-88 to about 7.8% in 2018-19<\/strong>. This has led to an <strong>increase in foreign exchange outgo<\/strong> on account of freight bill payments to foreign shipping companies.<\/li>\n<li>Since Indian ships are less competitive while compared to their foreign peers, therefore, the <strong>Right of First Refusal (ROFR) policy has not been able to fuel the growth of Indian tonnage<\/strong>. Data collected from the Indian National Shipowners Association (INSA) reflects that it issued NOCs in 95% of the cases processed under the ROFR mechanism.<\/li>\n<\/ul>\n<p>So, a policy to promote the growth of the Indian shipping industry is also necessary because having a bigger national fleet would provide economic, commercial, and strategic advantages to India.<\/p>\n<h5><strong>About the scheme:<\/strong><\/h5>\n<p>The scheme will provide Rs.1624 crore over five years as a <strong>subsidy to Indian Shipping companies in global tenders floated by Ministries and CPSEs for the import of government cargo.\u00a0<\/strong><\/p>\n<h5><strong>Key features of the scheme:<\/strong><\/h5>\n<ul>\n<li>The subsidy support varies from 5% to 15% of the lowest bid by a foreign shipping company. This depends on whether the ship was flagged after or before February 1, 2021, and the age of the ship at the time of flagging in India.<\/li>\n<li>Ships older than 20 years would not eligible for any subsidy under the Scheme<\/li>\n<li>The budgetary support would be provided directly to the Ministry\/Department concerned.<\/li>\n<li>The Scheme has laid out a monitoring framework which is detailed at also provides for effective monitoring and review of the Scheme.<\/li>\n<\/ul>\n<h5><strong>The expected outcome of the scheme:<\/strong><\/h5>\n<ul>\n<li>The scheme has immense <strong>potential to generate employment<\/strong>.\n<ul>\n<li>An increase in the Indian fleet will provide<strong> direct employment to Indian seafarers,<\/strong> since Indian ships are required to employ only Indian seafarers.<\/li>\n<li>It also increases <strong>indirect employment in the development of ancillary industries<\/strong> such as shipbuilding, ship repair, recruitment, banking, etc. and contributes to the Indian GDP.<\/li>\n<\/ul>\n<\/li>\n<li>A strong and diverse indigenous shipping fleet will not only <strong>lead to foreign exchange savings,<\/strong> but would also <strong>reduce excessive dependence on foreign ships for transporting India&#8217;s critical cargoes<\/strong>.<\/li>\n<\/ul>\n<p><strong>Terms to know:<\/strong><\/p>\n<ul>\n<li><a href=\"https:\/\/forumias.com\/blog\/what-is-right-of-first-refusal-rofr\/\" target=\"_blank\" rel=\"noopener\"><strong>Right of First Refusal (ROFR) policy<\/strong><\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Source:\u00a0The Hindu and PIB Relevance: The article highlights one of the challenges with Indian shipping industry and the new government scheme to tackle it. Synopsis: Cabinet has recently approved a scheme for the promotion of merchant ships in India by providing subsidy support to Indian shipping companies in global tenders floated by Ministries and CPSEs.&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/subsidy-scheme-for-shipping-firms-approved\/\">Continue reading <span class=\"screen-reader-text\">Subsidy scheme for shipping firms approved<\/span><\/a><\/p>\n","protected":false},"author":10311,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[221,216,299],"class_list":["post-118848","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-economy","tag-gs-paper-3","tag-infrastructure","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704950207},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/118848","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10311"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=118848"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/118848\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=118848"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=118848"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=118848"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}