Shipping Ministry Extends Merchant Ship Subsidy Scheme Through FY31

The Centre has extended the subsidy scheme for Indian companies flagging merchant ships in India till FY2030-31, the Ministry of Ports, Shipping and Waterways said on Thursday, as per PTI report. 

The scheme supports Indian shipping firms participating in global tenders floated by ministries and central public sector enterprises for the movement of government import cargo. 

The programme was approved by the Union Cabinet in July 2021 with an outlay of ₹1,624 crore for 5 years. It was announced in the FY22 Union Budget by Finance Minister Nirmala Sitharaman. 

Subsidy Linked to Foreign Bids 

Under the scheme, Indian shipping companies receive financial support when competing with foreign shipping firms in government cargo contracts. 

Ships flagged in India after February 1, 2021, and less than 10 years old at the time of flagging are eligible for subsidy support of up to 15% of the lowest foreign bid. 

The subsidy amount is limited to either 15% of the lowest bid offered by a foreign shipping company or the actual gap between the Indian company’s quote and the foreign bidder’s quote under the Right of First Refusal (ROFR) provision, whichever is lower. 

For existing Indian-flagged vessels that were below 10 years of age on February 1, 2021, the subsidy support is capped at 10% under similar conditions. 

Age Criteria for Ships 

The scheme does not cover vessels older than 20 years. The ministry said the eligibility conditions are intended to encourage the use of newer ships in the Indian merchant fleet. 

The subsidy programme applies to global tenders issued by ministries and central public sector enterprises for government imports. 

According to the ministry, the extension is for increasing the number of Indian-flagged merchant vessels and improving the participation of domestic shipping companies in international cargo movement. 

Additional Funds if Required 

The ministry said additional allocation may be sought from the Department of Expenditure if required because of the extended tenure and expanded scope of the scheme. 

The programme will now remain in force until the end of FY2030-31. 

Read More: iPhone Maker Apple Announces ₹100 Crore Investment for Renewable Energy Projects in India! 

Conclusion  

The extension keeps financial support in place for Indian shipping companies competing in global government cargo contracts. Ships older than 20 years will remain outside the scheme. 

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