India is in the advanced stages of setting up the second phase of the Ship Building Financial Assistance Policy (SBFAP) with an outlay of around ₹18,000 crore, Sarbananda Sonowal, Union Minister for Ports, Shipping and Waterways, told businessline in an exclusive interview.
The SBFAP 2.0, is “awaiting Cabinet approval” and will be financed entirely through budgetary support.
The new policy, mentioned by Finance Minister Nirmala Sitharaman in her Budget speech, will offer subsidy on the contracted price or fair value for vessels built in India over a 10-year time frame from 2024 to 2034. “The policy proposes subsidies for specialised, green and other highly specialised vessels while also including non-combat defence auxiliary vessels exported to friendly foreign nations,” Sonowal said.
For instance, under the proposed policy, shipyards would receive around 20 per cent subsidies for standard ships, around 25 per cent for specialised vessels and about 30 per cent for green or technologically advanced vessels. The subsidy rates will remain fixed throughout the scheme’s tenure, which is set to run until March 2034, those in the know said.
Credit Note
The SBFAP 2.0, Sonowal said, will also push for ship-breaking. Under this, a credit note of 40 per cent of the ship’s scrap value will be issued to the ship owner when their vessel is scrapped at an Indian yard. The note is reimbursable against the cost of constructing a new replacement vessel if the latter is at an Indian shipyard.
“We plan to set up a National Shipbuilding Mission for the implementation of SBFAP 2.0,” he said.
Interview on p8
