- 25 Jul 2024
- ICICI Securities
NEW SHIP-BUILDING POLICY TO BE UNVEILED BY GOVT SOON
News: Union Minister for Ports, Shipping & Waterways has said that a new shipbuilding policy will be unveiled soon, giving a push to India’s ambitious plan to be part of the top five shipbuilding nations by 2047. Currently, India stands at 22nd position in the world in terms of ship-building and aims to be among the top 10 by 2030. As per the media reports, to boost indigenous shipbuilding, the policy is expected to have a few measures like custom duty relaxations (for components and consumables for manufacturing of vessels), mandatory make in India clause for manufacturing coastal vessels by 2030, shipbreaking credit note scheme (under which issue of credit note amounting to 40% of the scrap value of ship undergoing breakage at Indian shipbreaking shipyard would be issued, with the credit note being reimbursable for construction of a new commercial ship) etc.
Views: We understand that the overall objective of the new ship-building policy would be to make India cost-competitive and cater to global demand of commercial vessels (including freight and passengers) in the coming years. India currently holds less than 1% of the global ship-building market which is dominated by countries like China, Japan and Korea. We believe that this policy would be favourable for companies like Shipping Corporation of India, Mazagon Dock Shipbuilders, Cochin Shipyard, Garden Reach Shipbuilders.
Impact: Positive