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Indian Shipbuilding Industry Set to Sail Green with Financial Assistance Policy
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Promoting Green Fuelled Vessels in Indian Shipyards
*New Delhi, November 2, 2023 -* The Indian Shipbuilding Industry is gearing up for a green transformation as Nebu Oommen, Ship Surveyor-cum-Deputy Director General (Technical), announced the Shipbuilding Financial Assistance Policy (SBFAP) on November 2, 2023. The policy is designed to promote the construction of green-fueled vessels in Indian shipyards, aligning with global green initiatives.
Aiding India’s Shipbuilding Ambitions
Back in 2015, the Government of India introduced the Shipbuilding Financial Assistance Policy to bolster domestic shipyards by offering financial aid for both domestic and export orders. This policy applies to shipbuilding contracts signed between April 1, 2016, and March 31, 2026.
Under the SBFAP thus far, 32 shipyards applied for registration, with 31 receiving approval and one still under process. From these shipyards, 162 principal applications were submitted, 148 approved, six under review, and 10 rejected. Additionally, the department received 122 fund applications, with 95 approvals, 14 under consideration, and 13 rejections.
Green Fuelled Vessels in Focus
The heart of this policy is the promotion of green-fueled vessels. Financial assistance is granted upon the delivery of vessels within the stipulated time frames outlined in the policy.
All applications are processed in line with the “GUIDELINES FOR IMPLEMENTATION OF SHIPBUILDING FINANCIAL ASSISTANCE POLICY,” as amended from time to time by the Ministry of Ports, Shipping, and Waterways, Government of India.
Financial Incentives for Green Initiatives
This policy opens new avenues for Indian shipyards, encouraging them to secure shipbuilding orders from the international market, supported by government financial assistance.
The policy provides support for a range of vessels, both standard and specialized, at varying rates of financial assistance, as per the guidelines. With the green fuel revolution gaining momentum globally, the Government of India is playing its part by promoting the construction of green-fueled vessels under the SBFAP. The key financial incentives include:
– A substantial 30 percent financial assistance for vessels with main propulsion achieved via green fuels like Methane, Ammonia, or Hydrogen fuel cells.
– A 20 percent financial assistance for vessels equipped with electric means of propulsion or hybrid propulsion systems.
Green Vessels: The Future Beckons
With a surge in green initiatives both nationally and internationally, the Indian government’s financial assistance policy encourages shipyards to embrace the construction of green vessels. This policy not only paves the way for India to contribute to global environmental goals but also opens up opportunities for the Indian shipbuilding industry to explore and excel in the green vessel market.
The online processing of financial assistance applications for shipyards is facilitated through the dedicated website shipbuilding.nic.in
As India sets sail into a greener future, the Shipbuilding Industry is called upon to seize the provisions of the government’s initiative and play a pivotal role in the construction of green-fueled vessels within the country.
Challenges and Opportunities
While the policy represents a significant step forward for India’s shipbuilding industry, challenges such as high costs and a need for greater awareness about green vessels among Indian consumers remain. Furthermore, navigating and complying with evolving regulations will be key for shipyards to capitalize on the benefits of this initiative.
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