Executive Matters Related to Commercial Shipping

New Delhi : The Government has taken various steps to deal with the executive matters of commercial shipping. The major steps are as mentioned below:

1. Ship Building Financial Assistance Policy (2016-2026):

  1. of India has approved the Financial Assistance Policy for Indian Shipyards on 9th December 2015, for grant of financial assistance to Indian Shipyards. Only those vessels shall be eligible for grant of financial assistance, for which the construction commences subsequent to the signing of valid contracts. Vessels which are constructed and delivered within a period of three years from the date of contract are eligible for availing financial assistance under the policy. For specialized vessels, the delivery period can be extended till six years. Financial assistance shall be @ 20% of the contract price, actual receipts, fair price (whichever is least) to Indian shipyards. Under the policy, the financial assistance extended would be reduced by 3% every three years.

2. Revision of the criteria for Right of First refusal (ROFR):

The criteria for granting the Right of First Refusal in chartering of vessels through tender process has been revised, for promoting tonnage under Indian flag and ship-building in India, so as to make India a Atma-nirbhar/self-reliant Bharat, in terms of tonnage and ship-building in India. The following is the revised hierarchy of RoFR;

(i)    Indian built, Indian flagged (Indian owned);

(ii)   Foreign built, Indian flagged (Indian owned);

(iii) Indian built, foreign flagged (foreign owned).

This will promote demand of Indian built vessels as the Indian built vessels will have the priority in chartering and will also provide additional market access and business support to ships built in India.

3. Subsidy support to Indian shipping companies:

A scheme for the promotion of flagging of merchant ships in India by providing Rs.1624 crore over a period of five years as subsidy support to Indian shipping companies in global tenders floated by Ministries and Central Public Sector Enterprises (CPSEs) has been approved by the Cabinet. The rate of subsidy support will be based on age of the vessel.

4. Integration of Inland and coastal shipping:

Inland Vessels have been allowed to operate within in five (05) nautical miles of the base line (inshore traffic corridor) in fair season and fair weather conditions.

5Cabotage Relaxation for cargo vessels:

Foreign flag vessels have been allowed to operate at Indian coast, without license from DGS, for:

(i) Carriage of transhipment containers, and empty containers at Indian coast.

(ii) Carriage of agriculture, horticulture, fisheries, and animal husbandries commodities, and fertilizers, if these contributes to at least 50% of the cargo on-board ships.

6. Measures for development of cruise tourism:

  1. Cabotage relaxation for Foreign flag passenger (cruise) vessels:

The foreign flag passenger (cruise) vessels have been allowed to visit more than one Indian ports up-to 2029 without license from Directorate General of  Shipping (DGS), GoI.

  1. Notification on Construction, Survey, Certification and Operation of Indian River Sea Passenger Vessels:

By DGS order 05 of 2017 issued on 28.07.2017, the scope of River Sea Passenger vessels have been expanded by covering more vessels in order to address varying needs of transportation of passengers & tourism in Indian coast.

Government of India has approved the Ship building Financial Assistance (SBFA) Policy for Indian Shipyards on 9th December 2015 for grant of financial assistance to Indian Shipyards for shipbuilding contracts signed between April 1, 2016 to March 31, 2026. The above policy caters for domestic orders and export orders, in accordance with the guidelines issued in this respect. The Shipyard is provided financial assistance upon delivery of the qualified vessels.

Under the SBFA policy, Ministry of Ports, Shipping and Waterways is providing financial assistance of 20% of contract price, actual receipts, fair price (whichever is least) to Indian shipyards for contracts signed between 2016 – 2026 to promote the Indian shipbuilding industry. Under the policy, the financial assistance extended would be reduced by 3% every three years.

As per the data available in the web portal dealing with the SBFA applications, 21 Shipyards having various capacities have registered under the scheme with order details of around 170 vessels which are being constructed. The total contract value of these 170 vessels amounts to Rs.2620 Crore.

Till now 47 vessels are already built and delivered to the buyers which amount to a total contract value of Rs.850 Crore. The financial assistance sanctioned to beneficiary shipyards towards the delivery of 47 vessels is Rs.155 Crore.

List of Shipyards registered under the SBFA Policy scheme is as under:


Sl. No. Name of Shipyard
1 Vijai Marine Services
2 Mandovi Drydocks
3 L & T Shipbuilding Limited
4 Sembmarine Kakinada Limited
5 Cochin Shipyard Limited
6 Shoft Shipyard Private Limited
7 A C Roy and Company
8 Chowgule and Company Pvt. Ltd.
9 Titagarh Wagons Limited
10 Dempo Shipbuilding and Engineering Private Limited
11 Marine Frontiers Private Limited
12 Navgathi Marine Design and Constructions Pvt Ltd
13 Konkan Barge Builders Pvt Ltd
14 Waterways Shipyard Pvt Ltd
15 Synergy Shipbuilders
16 Aaditya Shipping and Logistics
17 San Marine
18 Jhellingham Engineering Works Pvt Ltd
19 Goa Shipyard Limited
20 Moc Shipyards Private Limited
21 Garden Reach Shipbuilders and Engineers Ltd


This information was given by Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal in a written reply in Rajya Sabha today.

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