India's shipping ministry is asking for a tax holiday and more incentives for the shipbuilding industry in the upcoming Union budget, according to a report in the Economic Times. The Ministry has also prepared proposals to give a fillip to Prime Minister Narendra Modi’s Make in India campaign.
In a letter to the finance ministry, the Shipping counterpart also makes its case to get an excise duty exemption on raw materials and customs duty on imported capital goods used for shipbuilding. It asked that a 10-year tax holiday be granted to loss-making shipyards to help them save capital for further expansion.
The country has so far been a destination for breaking up ships that were done with their duty on the high seas, but the country now wants to become a hub to make them as well.
The shipping ministry official sources said that it has prepared a plan to boost domestic shipping industry by giving “tax breaks” for “shipyard building. They have mooted a string of measures to promote shipbuilding, including financial assistance in the range of 5% to 25%, to shipbuilding companies to spur local ship making industry.
“The ministry also wants to make it compulsory to import LNG on ships bearing Indian flags. This will create service opportunities for Indian players,” the official said.
The market observers say that the BJP government's 'Make in India' initiative could get top billing in the 2015-16 Union Budget with tax breaks and other measures for several sectors.
Make in India is the centerpiece of the Narendra Modi administration's bid to revive manufacturing activities and create millions of jobs. With the Chinese economy slowing, India senses an opportunity in the industrial sector.