India's government is preparing to vote on a significant new shipbuilding policy designed to elevate the country’s position in the global shipbuilding and ship recycling industries. This policy, known as Shipbuilding Policy 2.0, is expected to introduce a range of incentives aimed at making Indian shipyards more competitive, particularly against leading shipbuilding nations like China, South Korea, and Japan.
A key component of the policy is the introduction of a ship recycling credit note. This note will be worth 40% of the scrap value of vessels recycled at Indian yards, which can then be used to offset the cost of building a new ship at an Indian shipyard. Additionally, the policy proposes fixed subsidies for new building costs, with an extra 20% subsidy on standard new buildings. This subsidy increases to 25% for tankers and gas carriers and 30% for eco-ships equipped with advanced technologies. These incentives are set to be available until March 2034, with potential extensions through to 2047.
The policy is also focused on encouraging both domestic and international shipowners to recycle ships in India. By linking ship recycling with new ship construction, the government aims to create a sustainable cycle that benefits both sectors. The overall goal is to increase India's share of the global shipbuilding market, which currently stands at less than 1%, and push the country into the top 10 by 2030 and the top five by 2047.
To further support the industry, the government plans to establish maritime clusters in the states of Andhra Pradesh, Gujarat, and Odisha. These clusters are intended to foster growth in shipbuilding and ship recycling, with an emphasis on attracting international participation and investment.
The Indian shipbuilding industry was valued at USD 90 million in 2022, with major players including Cochin Shipyard, Hindustan Shipyard, Larsen & Toubro Shipyard, and Mazagon Dock Shipbuilders. There are also efforts to revive former shipyards and build new ones, such as Swan Energy's revival of Pipavav Shipyard and the Adani Group's plans to construct a large shipbuilding yard on India's west coast.
In recent years, Indian shipyards have primarily focused on government and military contracts, with fewer orders for commercial ships. However, the government aims to grow the industry’s value to over USD 8 billion within the next decade.
Industry experts believe that the new policy if implemented effectively, could significantly boost India's position in the global shipbuilding market. By offering competitive incentives, India hopes to attract more shipowners to recycle and build ships domestically, potentially transforming the country into a leading hub for ship recycling and construction.
While the policy has garnered optimism, there is some caution about the timeline for its implementation. Industry professionals acknowledge that it may take time for the policy to fully roll out, but they remain hopeful about its potential to drive significant growth and innovation in India's shipbuilding and recycling sectors.
Comments
No comment yet.