The country’s difficult fiscal regime coupled with the absence of a level playing field have not only discouraged foreign ship owners to explore India as an investment hub but have also stymied the growth of the domestic shipping lines, the Shipping Ministry has told the Prime Minister’s Office.Making a slew of suggestions to enhance the competitiveness of the industry, Secretary in the Shipping Ministry Pradeep K Sinha, in a letter to Principal Secretary to the PM Pulok Chatterji and Secretary, Economic Affairs, Finance Ministry Arvind Mayaram, said the Government must extend long-term loans at attractive interest rates on par with international costs for enhancing the Indian flag tonnage to encourage shipbuilding.
For this the local shipping industry should be permitted to raise foreign currency loans or bonds through an identified financial institution.
He pointed out that rupee debt re-financing for external commercial borrowings should be extended to shipping to ensure lower costs of finance.
“There is an urgent need to consider such initiatives as currently new ships are available at cheap rates in the global markets but Indian shipping has not been able to take advantage of this situation,” Mr. Sinha said. The letter calls for infrastructure status to coastal shipping to enable easier access to funds.
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