India: Customs duty, cargo support to be used to boost local shipbuilding, repairs
The government plans to use a mix of duty restrictions on small vessel imports and the prevailing cargo support policy in a multi-pronged strategy to grow the local shipping, ship building and repairs industry.
The Customs duty paid on the import of vessels will be fully refunded if the vessel is replaced by a new Made in India vessel in four years, according to the Maritime India Vision 2030 document prepared by the Shipping Ministry.
State-owned firms will provide long-term charters of over seven years for vessels made in India from 2021 and provide long-term cargo visibility (6-9 months) for all vessels.
Foreign-built and foreign flagged vessels will be suitably disincentivised to provide a level-playing field to India-built and Indian-flagged ships, it said. Ship repair work valued below 200 crore will be carried out at local shipyards only under the Atmanirbhar Bharat provisions.
The right of first refusal (ROFR) rules framed in 2016 would be strictly followed in the case of shipbuilding and ship repair works of over 200 crore. Entities functioning under the Shipping Ministry will ensure that all vessels owned and operated by them are repaired at Indian shipyards only.
GST for ship repair and its inputs will be at 5 per cent while the free trade warehousing zone (FTWZ) requirements for minimum size and investment outlay would be waived off for ship repair-specific free trade depots/units.
Right of first refusal
Vessels availing cargo ROFR through PSUs and government entities sh....