Indian Shipbuilders to Get a Lifeline

The Indian government is about to consider a subsidy scheme intended for the domestic shipbuilding industry prepared by the Union Ministry for Shipping.

The subsidy scheme is set to be reviewed by the government this week and underlies a 10-year program aimed at helping boost competitiveness of local shipyards and facilitate their debt restructuring activities.

If approved, the scheme would pave the way for shipyards to attain infrastructure status. In addition, it would seek to introduce a special dispensation for repeat restructuring of ailing shipyards such as Bharati Shipyard, ABG Shipyard and Pipavav Defence and Offshore Engineering up to 2020, Live Mint reports.

The proposed subsidy would cover for the 30% of extra costs Indian shipbuilders have to pay stemming from “higher bank rates on working capital loans for purchasing raw materials and other inputs,” M. Jitendran, former Chairman of Cochin Shipyard Ltd, is reported as saying by the newspaper.

The move aimed at introducing the subsidy comes eight years after the expiration of the previous subsidy scheme.

World Maritime News Staff