b) Ship repair

The Indian ship repairs industry consists of around 7 ship repair units (SRU’s): Alcock Ashdown & Co. Limited, Chennai Port Trust, Hindustan Shipyard Limited, Mumbai port Trust, Cochin Shipyards, Garden Reach Shipbuilders and Mazgaon Dock Limited have been given the permanent approvals as SRU’s.

SWOT Analysis of Indian Shipbuilding Industry

Global recession in the shipbuilding industry has affected the financial position of a number of yards especially in the private sector. Due to market downturn post 2008 and lack of government policy support, all shipyards other than the defence shipyards are facing challenging times with very few global shipbuilding orders coming in. The Indian shipbuilding industry has continued to concentrate on defence and offshore sector vessels. The fleet expansion plans of Indian Navy and the vessels for the Indian Coast Guard are the two prime segments which were targeted by the Indian shipyards. Lack of orders from the Indian commercial ship owners and the lack of government policy support adversely affected the Indian shipbuilding outlook. In the year 2016, the Government has taken following initiatives to strengthen shipbuilding industry:

♤ Infrastructure status for shipyards: With this inclusion, shipyards will be able to avail flexible structuring of long term project loans, long term funding from Infrastructure Funds at lower rates of interest and for a longer tenure equivalent to the economic life of their assets, relaxed ECB norms, issuance of infrastructure bonds for meeting working capital requirements.

♤ Financial assistance and eligibility support for Indian shipyards: The Government of India has introduced a Rs. 4000 crore Shipbuilding Financial Assistance Policy for a period of 10 years to encourage domestic shipbuilding.

♤ Simplification of procedure for tax compliance: To promote ease of doing business in the sector, in the Union Budget 2016-2017, Government of India has issued simplified procedure for tax compliance for the shipyards while procuring duty free goods for shipbuilding and ship repair.