Cabinet approves scheme to provide Rs. 1,624 crore subsidy to Indian shipping companies in global tenders

New Delhi, July 14, 2021

The Union Cabinet today approved a scheme to provide Rs 1,624 crore over five years as a subsidy to Indian shipping companies in global tenders floated by the Ministries and Central Public Sector Enterprises (CPSEs) for the import of government cargo.

For a ship flagged in India after February 1, 2021 and less than 10 years old at that time, the subsidy support would be extended at 15% of the quote offered by the foreign shipping company or the actual difference between the quote offered by the Indian flag vessel exercising ROFR and the quote offered by the foreign shipping company, whichever is less.

For a ship flagged in India after February 1, 2021 and which is between 10 to 20 years old at the time, the subsidy support would be extended at 10% of the quote offered by the foreign shipping company or the actual difference between the quote offered by the Indian flag vessel exercising ROFR and the quote offered by the foreign shipping company, whichever is less.

The rate at which the subsidy support is extended would be reduced by 1% every year, till it falls to 10% and 5%, respectively, for the two categories of ships mentioned.

For existing Indian flagged ship which is already flagged and less than 10 years old on February 1, 2021, the subsidy support would be extended at 10% of the quote offered by the foreign shipping company or the actual difference between the quote offered by the Indian flag vessel exercising ROFR and the quote offered by the foreign shipping company, whichever is less.

For existing Indian flagged ship which already flagged and between 10 to 20 years old on February 1, 2021, the subsidy support would be extended at 5% of the quote offered by the foreign shipping company or the actual difference between the quote offered by the Indian flag vessel exercising ROFR and the quote offered by the foreign shipping company, whichever is less.

The provisions of this subsidy support would not be available where an Indian flagged vessel is an L1 bidder.

The budgetary support would be provided directly to the Ministry/Department concerned.The subsidy support would be extended only to those ships which have bagged the award after the implementation of the scheme.

Ships older than 20 years would not eligible for any subsidy under the scheme. Given the enlarged scope of the Scheme, this Ministry will seek allocation of such additional funds from the Department of Expenditure as may be required. The scheme would be reviewed after 5 years, an official press release added.

NNN

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