Shipping Ministry amends Right of First Refusal license to prioritise Indian vessels

New Delhi (NVI): In a major boost to shipbuilding in India, the Shipping Ministry has amended the existing Right of First Refusal (ROFR) licensing norms and now the first priority in chartering of vessels will be given to ships built and flagged in India as well as owned by Indians.

Union Minister Mansukh Mandaviya today said, “Ministry of Shipping is working with a focused approach to promote shipbuilding in India as per AatmaNirbhar Bharat vision of Prime Minister Narendra Modi.”

“The revision of ROFR licensing conditions is a giant step towards AatmaNirbhar Shipping. It will promote ‘Make in India’ initiatives through self-reliance and will give a strategic boost to domestic Ship building industries, contributing towards long-term economic growth of India,” he added.

To promote the demand of the ships built in India, priority in chartering of vessels is given to vessels built in India, flagged in India and owned by Indians under the amendments in the guidelines of the ROFR.

The second priority will be given to foreign built, Indian flagged and Indian-owned vessels while the third priority will be given to Indian built, foreign flagged and foreign-owned ships.

The minister said the idea was to enhance India’s share in global shipbuilding from barely one per cent at present to 3 per cent in the next five years.

All vessels flying the flag of India (i.e. registered in India) up to the date of issue of new circular by the Director General of Shipping shall be deemed to be Indian built vessels, the Ministry of Shipping said in a statement.

Besides, the foreign flagged vessels permitted by DG (Shipping) for chartering by an Indian citizen/company/society, who is building a ship in an Indian shipyard for registration under the Indian flag, as a temporary substitute for the Indian ship under construction, shall come under first priority provided 25 per cent of the contract money has been paid to the Indian shipyard and 50 per cent of the hull fabrication has been completed, as certified by recognised organisation, the statement added.

The duration of licence to such chartered vessel shall be limited to the period of building of the ship, as mentioned in the shipbuilding contract.

It is to be noted that Ministry of Shipping has made provision for long-term subsidy for shipbuilding activities under shipbuilding financial assistance policy (2016-2026). The Ministry has already disbursed an amount of Rs 61.05 crores till date under this policy.

It is an endeavour of the Government to further incentivise shipbuilding by providing additional market access and business support to ships built in India.