Government to prioritise chartering for ships built in India

As Shipping Minister Nitin Gadkari will launch the new rules on Tuesday, the government is expecting an increase in demand for such ships with this move.

Published: 18th February 2019 05:44 PM  |   Last Updated: 18th February 2019 05:44 PM   |  A+A-

Nitin Gadkari

Union Minister for Shipping Nitin Gadkari (File | PTI)

By PTI

NEW DELHI: In order to promote Make in India initiative, ships built in the country will now get priority in chartering under a new policy, the government said Monday. Shipping Minister Nitin Gadkari will launch the revised guidelines in this direction on Tuesday.

"In a big step to promote Make in India initiative and incentivize ship-building activity in the country, Ministry of Shipping has revised its guidelines for chartering of ships by providing Right of First Refusal( RoFR) to ships built in India," the shipping ministry said in a statement.

Henceforth, whenever a tendering process is undertaken to charter a vessel, a bidder offering an indigenously-built ship will be given the first priority to match the lowest bidder quote, it said.

The statement said it is expected that the priority given to ships built in India will raise the demand for such vessels, providing them with additional market access and business support. A policy in this regard will be launched by Gadkari in Mumbai on Tuesday during the inauguration of the two-day Regional Maritime Safety Conference.

Prior to the revision of the guidelines, the RoFR was reserved for Indian flag vessels as per the relevant provisions of Merchant Shipping Act, 1958. The existing licensing conditions have been reviewed in consonance with India's policy of promoting Make in India initiative, the statement said.

The review is also in line with the need to give a long term strategic boost to the domestic shipbuilding industry. The shipping ministry has also laid down eligibility conditions and rules for the exercise of the RoFR.

One of the rules says, "The RoFR would be exercised only in case the vessel being offered for charter by the lowest bidder has been built outside India." The government has taken several steps to promote shipbuilding in India, especially by providing long-term subsidy under the Shipbuilding Financial Assistance Policy (2016-2026).

A budgetary provision of Rs 30 crore was earmarked in 2018-19 for providing financial assistance to all Indian shipyards, excluding Defence Shipyards. An amount of Rs 11.89 crore has already been disbursed to three shipyards.

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