Mumbai: Gujarat, India’s top maritime state by cargo handled at state-owned ports, is finalizing a shipbuilding policy that has set an ambitious target to grab more than half of the country’s shipbuilding market by 2020, an official at the western state’s maritime regulator said.
The state will be the first in the country to have a separate policy on shipbuilding.
A draft policy prepared by the government seeks to extend tax holidays to shipbuilding projects for five years. Such projects will also be entitled to the same fiscal and duty benefits as those granted to so-called special economic zone (SEZ) projects of the Union government, said G.R. Jadega, technical adviser to the Gujarat Maritime Board.
The government also plans to offer power at concessional rates to entities setting up yards and exempt them from octroi. The government will lease land to such firms.
India’s share in global shipbuilding is expected to be around 15%, or $22 billion (Rs87,560 crore), by 2020, from the current level of 0.4%, aided mainly by cost advantages and an abundant supply of labour, according to a report prepared by Mumbai-based consultancy firm i-maritime Consultancy Pvt. Ltd.
The Gujarat government proposes to invite private players to set up medium-sized yards capable of building ships with a cargo carrying capacity of 30,000-50,000 tonnes.
“The draft policy will have to be approved by the Gujarat cabinet before it can be implemented,” said Jadega.
More than 20 firms have shown interest to set up shipbuilding facilities in the state with investment plans of about Rs11,000 crore, and with a potential for 100,000 jobs.
Six firms, including India’s biggest private sector shipbuilder ABG Shipyard Ltd, SKIL Infrastructure Ltd and the Adani Group are in the process of building full-fledged yards at Dahej, Pipavav and Mundra ports respectively.
ABG and Larsen & Toubro Ltd currently have facilities to build ships at Hazira.
The state’s maritime board has identified eight potential sites to build and repair ships. These include stretches of Mandvi to Modhva, Navlakhi to Jodia, Gogha to Mahuva, Khambhat to Jambusar, Okha to Que Island, Simar to Chhara, Vansi Borsi to Maroli, and Porbandar to Jaffrabad.
With capacities in traditional shipbuilding nations such as Japan, South Korea and Norway booked for the next few years, global fleet owners have started looking at new destinations, including China, Vietnam and India to have their ships built.
Gujarat government-owned ports hold 70% of the share of cargo handled among all ports run by maritime states in the country (130 million tonnes out of 185mt in fiscal 2007).