Back to Growth: Union Budget 2021-22 announcement – Shipping Sector
From once being ranked at 54 in 2014, India jumped 10 spots in 4 years to rank 44 in 2018 in the Logistics Performance Index. This is testimony of the fact that the Indian Government’s effort of creating an efficient and state of the art logistics infrastructure across the country to aid the growth and development of domestic industries and an important positive factor for foreign players looking to enter the market.
India has its focus set on meeting the future growth in traffic and to increase the freight movement across the country and through the country to other international destinations. Developing a strong network of ports is extremely essential for achieving this goal. The Finance Minister in today’s Budget speech highlighted the government's strong focus towards the sector.
It was announced that major Ports across the country will be moving from managing their operational services on their own to private players entering and managing the operations. For this purpose, 7 projects worth about INR 2,000 crores will be offered by the Major Ports on Public Private Partnership mode in FY21-22.
The government also announced a scheme for promoting flagging of merchant ships in India. It will be supported by the Government by providing subsidy support to Indian shipping companies in global tenders floated by Ministries and CPSEs. An amount of INR 1,624 crores will be allocated for over 5 years.
It was highlighted in the Budget speech that India has enacted Recycling of Ships Act, 2019 and acceded to the Hong Kong International Convention. The Finance Minister also mentioned that around 90 ship recycling yards at Alang in Gujarat have been granted the HKC compliant Certificate.
The Government will work strongly towards bringing more ships to India from Europe and Japan. The Government aims to achieve a total capacity of around 4.5 million Light Displacement Tonne (LDT) by 2024.
By encouraging private participation in the sector, India aims to capitalize upon the advantage of its geographical location and become a strong and viable option for many domestic and international players.
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