Indian shipyards face the threat of becoming less competitive following the expiry of the five-year Government subsidy scheme about two months ago.
The shipyards have asked the Government to resume the subsidy scheme, as shipbuilding, unlike conventional manufacturing
, is not protected by tariff barriers and they have to compete with global players for both domestic and export orders.
Sources say that the end of subsidies may not have an immediate impact on the balance sheets of the shipyards as the global market continues to be hot as also the prices of new ships.
The Government had introduced the 30 percent subsidy scheme for private sector shipyards in 2002, as the industry had no protection in the form of tariff barriers.
Source: Business Line