It is not hidden from anyone that India is a big importer in the world. At the same time, the country has gone on the path of becoming an exporter. Whose path passes through the sea. If a country wants to become a big exporter and importer of the world, then he will have to become the king of the sea. For this, the country needs many ships. The government of India has started preparations.
Now India is working on a new scheme to promote domestic ships. There is also a reason for that. The current plan is fully failing to meet its target, due to which there is a lot of obstacles in the relief of becoming the main player of Marine Trade.
For which there has been a discussion between all the ministers of the government, in which demand for 200 new ships has come out. The price of which is being said to be 1.30 lakh crore rupees. These demands have been seen more mainly from the Ministry of Petim, Steel and Fertilizers. Let us also tell you what is the whole plan.
Government will buy 200 ships
Giving information in the ET report, the Ministry of Ports, Shipping and Waterways said that the Ministry of Shipping is working with petroleum and natural gas, steel and fertilizer ministries to address low imports on Indian flagged ships. The ministry said that as a result, about 200 ships of 8.6 million gross tons (GT) of about Rs 1.3 lakh crore have been demanded, which will be in joint ownership of public sector companies (PSUs) and will be built in Indian shipyard over the next few years.
The new attempt of the Center is being seen to strengthen the lineup of Indian Flagged ships merchantships because the current 1,624 crore plan to promote such ships can miss its target. Maritime Trade Expert says that the stake of goods carried by Indian flagged vessels in imports is still about 8 per cent, with no changes since the scheme started in 2021.
Why did the current plan flop?
In the media report, a senior official said that now the scheme is expected to be reviewed, but till now only 330 crores has been distributed and the stake of Indian flagged ships remains in single digits. The scheme was announced in the budget of financial year 22 and in July 2021, it was approved by the Union Cabinet.
Indian shipping companies participating in global tenders issued by the Center and its branches, providing subsidy of up to 15 per cent, were to be distributed till FY 26. Concessions were given for imports of government goods like crude oil, liquid petroleum gas (LPG), coal and fertilizer. Indian ships’ stake in the country’s export imports (EXIM) trading fell from 40.7 per cent in 1987-88 to about 7.8 per cent.
According to official estimates, this led to an annual foreign exchange expenditure of about $ 70 billion to foreign shipping lines. Indian ports operated about 1540.34 million metric tons (MMT) cargo in 2023–24, which is 7.5 per cent higher than a year ago.
What are challenges
According to official estimates, Indian Flagged ships essentially hire Indian sailors, as well as domestic taxation and corporate laws, which will increase the operational cost by 20 per cent. Those keeping an eye on the area say that the main reason for the operation in the operation is due to the taxation on the salary of the Indian sailors working on the high cost, low loan tenure and Indian ships.
There is also an integrated GST on Indian companies importing ships, GST tax credit detraction, discriminatory GST on Indian ships providing services between two Indian ports; All these do not apply to foreign ships providing similar services. The domestic industry is advocating to reduce these fees and taxes.
Anil Deoli, CEO of the Indian National Shipon Association, told that nothing has happened to reduce this burden of fees and taxes on Indian ships, which affects their competitiveness.