Government's Maritime Commitment
The government has invested significantly in the maritime sector, with ₹5.8 lakh crore allocated for Sagarmala by 2035.
Over 241 projects have been completed, and 234 projects are underway.
Key focus areas include port modernization (50%), port connectivity (35%), and port-led industrialization (10%).
The government aims to transform India's ports into world-class facilities, enhancing efficiency and reducing logistical costs.
Economic Growth and Shipping Industry Challenges
India’s GDP grew by 43% from 2016-2023, and EXIM trade grew by 77%.
Despite these gains, the shipping industry remains stagnant, with only a 14% increase in cargo handled and a decline in vessel numbers.
The aging fleet and reliance on foreign-flag vessels are major concerns.
Despite stagnation in shipping, India’s trade volume has increased, highlighting the disconnect between economic growth and shipping performance.
Barriers in Shipping and Shipbuilding
Indian shipping faces capital constraints, high borrowing costs, and unfavorable taxation compared to foreign vessels.
The shipbuilding industry struggles with infrastructure, high input costs, and skill gaps.
The government has responded with initiatives like the Maritime Development Fund (MDF) and infrastructure status for vessels.
Indian shipowners continue to lose market share to foreign-flagged vessels, partly due to a lack of competitive financial support and regulations.
Tax Disparities and Future Challenges
The budget failed to address tax disparities, with Indian ships facing a 5% IGST and TDS on seafarers' salaries, unlike foreign ships.
The maritime sector needs long-term financing, green tech investments, and new shipyards.
The MDF could help bridge funding gaps but needs strategic use to attract lower interest external borrowings.
The industry calls for long-term regulatory reforms to foster competitiveness, especially to reduce dependence on foreign markets for ships and technology.
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