India said to offer incentives to boost shipbuilding industry

Finance Minister Nirmala Sitharaman is expected to announce the plans when she presents the annual budget for 2023/24 to parliament on February 1, a senior government official with the direct knowledge of discussions told Reuters

India plans to offer cash subsidies, lower taxes and other incentives to bolster its shipbuilding industry, two government sources said, as part of an effort to reduce the pain of high freight rates for the nation's manufacturers.

The plans include subsidies so that at least 50 new vessels can be built, as well as granting "infrastructure status" to the industry which would help with financing from banks, said the government officials.

This could also include incentives to build small vessels and promote battery-driven small vessels, aiming to cut diesel consumption and carbon emission by ships in the coming years, they said.

A ₹10-billion ($123 million) maritime development fund is also likely to be established, they added, without providing further details.

Finance Minister Nirmala Sitharaman is expected to announce the plans when she presents the annual budget for 2023/24 to parliament on February 1, a senior government official with the direct knowledge of discussions told Reuters.

Details are, however, subject to change as budget consultations are ongoing, the official said, noting the plans had the support of economic advisors of Prime Minister Narendra Modi, who unveiled Maritime Vision-2030, in 2020, aiming to expand domestic shipping and ports capacity.

The sources were not authorised to speak to media and declined to be identified. A finance ministry spokesman declined to comment.