India sets Rs 24,736 Cr plan to end 95% dependence on foreign ships: Sonowal

Guwahati, Nov 5: Although 90 per cent of India's foreign trade (by volume) is conducted through maritime routes, the country is heavily dependent on foreign vessels, for which it spends around Rs 6 lakh crore annually. To deal with the issue, the Government of India has chalked out an ambitious plan to transform the country into a major shipbuilding hub.

The Minister in charge of Ports, Shipping and Waterways, Sarbananda Sonowal, told The Assam Tribune that a ship-building financial assistance scheme of Rs 24,736 crore has been created by the Government of India and the country should be self-sufficient on vessels within the next 25 years.

Currently only about 5 percent of India's EXIM cargo is carried on in Indian owned or flagged ships and for the rest 95 per cent the country is dependent on foreign ships. As a result, India is losing huge foreign exchange, while, national security is compromised due to dependence on foreign shipping companies.

Sonowal said that if India becomes self dependent, it will have huge impact on employment and investment, while, employment in ancillary industries will also go up. According to an estimate, more than two million Indians would get employment in shipping industry when India becomes self dependent.

The Minister said that a multi-pronged strategy has been adopted to make India self-reliant. He revealed that apart from the Shipbuilding Financial Assistance Scheme, the government has also created a Maritime Development Fund of Rs 25,000 crore and a Capacity and Capability Development Fund of more than Rs 19,000 crore. The target is to make India one of the top ten shipbuilding nation by 2030 and among the top five by 2047.

Sonowal further said that India, which had been a traditionally strong shipbuilding nation since thousands of years ago, lost its prominence and the Shipping Sector was neglected by the earlier dispensations.

South Korea had been providing 30 per cent direct subsidy on each vessel from 1968 onwards, China too has been providing shipbuilding subsidy from 2006 onwards.

Tax exemptions have also been provided by both China and South Korea from 2006, and 2015 onwards. Financial support to shipbuilders was made available by these countries at low interest rates of 4 to 8 per cent.

Research and development support was also provided by these countries over the decades. As a result, 76 per cent of the world's shipbuilding has been captured by these two countries, while India holds merely 0.07 per cent of global shipbuilding tonnage.