“Shipping ministry has sought policy support in terms of low working capital loan interest rates like China and Korea. A Merchant Maritime Fund can be set up like Brazil has done, to provide long term loan at interest rates of 4-6%,” the official said. He further added that tax exemption for the first ten years can also be given as it is a sunrise sector. Certain relaxations with regard to custom duty on imported spare parts and six year income tax holiday for new shipbuilding yards can be given.

As per another official, like China, the Centre can provide production subsidy, investment subsidy and entry subsidy to lower shipbuilding cost in India. He said other countries like South Korea, Norway have dedicated maritime fund structures to incentivise shipyards.

Currently, China (58%), Japan(13%) and South Korea(24%) account for 95% of world shipbuilding market. As of 2022-23, world shipbuilding market is $140 billion. Top shipbuilding companies include China State Shipbuilding Corporation, Hyundai Heavy Industries and Mitsubishi Heavy Industries. Vietnam and Philippines are other emerging players in shipbuilding.

Centre may provide production subsidy

According to an official, like China, the Centre can provide production subsidy, investment subsidy and entry subsidy to lower shipbuilding cost in India. He said other countries like South Korea, Norway have dedicated maritime fund structures to incentivise shipyards. Currently, China (58%), Japan(13%) and South Korea(24%) account for 95% of world shipbuilding market. As of 2022-23, world shipbuilding market is $140 billion.