Government Extends Subsidy Scheme for Merchant Ship Operators Until Fiscal Year 2023-2024

Government Extends Scheme for Subsidies to Indian Shipping Companies

The Ministry of Ports, Shipping and Waterways has announced an extension of the scheme for providing subsidies to Indian companies flagging merchant ships in India. The scheme has been extended for a further period of five years, until the financial year 2030-31, reinforcing India's commitment to strengthening its maritime fleet and global shipping presence.

The scheme was first introduced in July 2021, with an outlay of Rs 1,624 crore over five years. The Union Cabinet approved the scheme to promote the flagging of merchant ships in India and achieve the objective of Atmanirbhar Bharat. The scheme was announced by Finance Minister Nirmala Sitharaman during her budget speech for FY22.

Under the scheme, Indian shipping companies bidding for global tenders floated by ministries and central public sector enterprises for imports of government cargoes are eligible for subsidies. The subsidy amount is calculated based on the quote offered by the lowest bidding foreign company (L1) or the actual difference between the quote offered by the Indian-flagged vessel exercising Right of First Refusal (ROFR) and the L1 foreign company, whichever is less.

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Ships older than 20 years are not eligible for any subsidy under the scheme. To accommodate the enlarged scope of the scheme, the shipping ministry will seek allocation of additional funds from the Department of Expenditure if required.