New Delhi, Jul 14 (KNN) Cabinet has approved scheme for promotion of flagging of merchant ships in India by providing subsidy support to Indian shipping companies in global tenders floated by Ministries and CPSEs.

The Union Cabinet chaired by the Prime Minister Narendra Modi has approved a scheme to provide Rs.1624 crore over five years as a subsidy to Indian Shipping companies in global tenders floated by Ministries and CPSEs for import of government cargo, according to an official statement. 

According to the scheme, for a ship which is flagged in India after 1st February 2021 and is less than 10 years at the time of flagging in India, the subsidy support would be extended @15% of the quote offered by the L1 foreign shipping company OR the actual difference between the quote offered by the Indian flag vessel exercising ROFR and the quote offered by the L1 foreign shipping company, whichever is less.

If a ship that is flagged in India after 1st February 2021 and which is between 10 to 20 years old at the time of flagging in India, the subsidy support would be extended @10% of the quote offered by the L1 foreign shipping company OR the actual difference between the quote offered by the Indian flag vessel exercising ROFR and the quote offered by the L1 foreign shipping company, whichever is less.

The rate at which the above subsidy support is extended would be reduced by 1% every year, till it falls to 10% and 5%, respectively, for the two categories of ships are mentioned above.

For existing Indian flagged ship which is already flagged and less than 10 years old on 1st February 2021, the subsidy support would be extended @10% of the quote offered by the L1 foreign shipping company OR the actual difference between the quote offered by the Indian flag vessel exercising ROFR and the quote offered by the L1 foreign shipping company, whichever is less.

For existing Indian flagged ship which already flagged and between 10 to 20 years old on 1st February 2021, the subsidy support would be extended @5% of the quote offered by the L1 foreign shipping company OR the actual difference between the quote offered by the Indian flag vessel exercising ROFR and the quote offered by the L1 foreign shipping company, whichever is less.

The provisions of this subsidy support would not be available in the case where an Indian flagged vessel is the L1 bidder.

The budgetary support would be provided directly to the Ministry/Department concerned. The subsidy support would be extended only to those ships which have bagged the award after the implementation of the scheme. Flexibility in the allocation of funds for expenditure from one year to another and within the various Ministries/Departments of the scheme.

Ships older than 20 years would not eligible for any subsidy under the Scheme. The scheme would be reviewed after 5 years.