The Union Cabinet onWednesday approved a scheme for promotion of flagging of merchant ships in India by providing subsidy support to domestic shipping companies in global tenders floated by Ministries.
As per the scheme, a subsidy of Rs 1,624 crore over five years to domestic shipping companies will be given in global tenders floated by Ministries and central public sector enterprises.
The move has brought in an opportune time to invest in Indian flagged vessels, said industry experts.
The policy was announced in February as part of the fiscal 2022 Union Budget.
As per the scheme, for a new ship, which is less than 10 years old on the date of flagging in India, the subsidy support will be 15 per cent of the lowest quoted offer by a foreign flagged company in a tender. This subsidy for a 10-20-year-old ship will be 10 per cent.
After the scheme is launched, this rate will be reduced by 1 per cent every year till it reaches 10 per cent and 5 per cent, respectively.
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