Indian Shipping Industry Focus
India has one of the largest merchant shipping fleet and ranked 17th among the developing countries with average age of the fleet being 18.03 years. 95% of the country’s trade by volume (68% in terms of value) is moved by sea.
India has a total of 1299 ships comprising of 11.24 MGT as on 31.10.2016. Out of the total tonnage, 900 vessels of about 1.52 million GT are engaged in Coastal trade and remaining 399 vessels are plying in overseas trade.
Despite growth in tonnage, the percentage of cargo carried by Indian flag ships has reduced from 40.7% in 1987-88 to 7.45% of total EXIM trade in 2014-15.
The Ministry of Shipping has taken many proactive and progressive interventions for the development of the maritime sector in the country.
Promoting “Ease Of Doing Business”: This has been at the core of the efforts of the Ministry during the year. Focus has been on simplifying procedures by removing irritants that make it cumbersome to carry on business smoothly.
Freight charged by the shipping companies for import of goods into India has been excluded from the Negative List and permitted availment of CENVAT credit on inputs used for providing such service.
The transport service for export of cargo was not being treated as export and CENVAT credit was also not available for export of goods, which made the service costlier for Indian flag ships.
Realizing the need for encouraging transportation of goods through coastal shipping rather than road or rail, the Government, in the Union Budget 2015-2016, had brought the abatement of service tax at par with road and rail i.e. 70%.
