As promised, I’m doing a thread on the very enabling budget provisions for the maritime sector. Shipbuilding is a *strategic mother industry* which can galvanise other sectors and give a fillip to the national GDP by itself. Japan (post WW2) & South Korea have shown this. 1/n
Everyone is thrilled about the new tax slabs in the budget (which is certainly great news for the salaried class). Let me cover in this 🧵 what the MSMEs / Startups are cheering about. In another 🧵, I’ll cover the implications for the maritime sector (which also are HUGE). 1/n
— Arun Golaya (@Arun_Golaya) February 1, 2025
Today 🇮🇳 has only 0.06% of the global shipbuilding market & is ranked 20th. If we want to break into the top 10 by 2030 & top 5 by 2047, big ticket reforms are needed. The budget provides these👇🏻 (though, of course, much more can be done). 2/n @CaptDKS @nmfindia @My_Rhaps
A long standing need for a ‘Maritime Development Fund (MDF)’ has been met. The initial corpus of ₹25,000 Cr will have 49% Govt contribution. The balance will come from Major Port Authorities, other govt entities, Central PSEs, financial institutions & the Pvt sector. 3/n
The MDF will help financing for ship acquisition (for boosting Indian flagged ships share in the global cargo volume upto 20% by 2047) & secure Indian strategic interests. By 2030, MDF is aiming for ₹1.5 lakh cr investment in the sector! 4/n @IMU_HQ @INNavylife @Huma_Siddiqui
New mega shipbuilding clusters will be set up. Direct capital support (creating breakwaters, dredging) & a 10-year rent holiday for land (except when provided at a nominal rate) is envisaged. Creation of trunk infra (roads, utilities, sewage treatment etc.) will be supported. 5/n
The proposed allocation of ₹6,100 crore will support existing shipyards to upgrade, modernise & automate operations. This will boost efficiency, utilisation & overall output. There is also focus on training & human capital development to make available a skilled workforce. 6/n
‘Shipbuilding Capability Development Centres’ aim at innovative ship design and engineering and testing & evaluation of new projects (outlay of ₹1200 cr). Additional ₹1040 cr earmarked for existing / upcoming shipbuilding design & training centres incl from the Pvt sector. 7/n
The ‘Shipbreaking Credit Note’ can be a game changer. Shipbreaking will get a Credit Note of 40% of scrap value. To reimburse, owners need to buy new ships made in 🇮🇳 . This is good for both ship- breaking & building in 🇮🇳 (and could hit ship breaking in 🇵🇰 , 🇧🇩 & others). 8/n
A budgetary allocation of ₹610 crores is proposed for a support scheme for Research & Development (R&D) and innovation in ship technology. This is good not only for the maritime industry but will also promote R&D and innovation.9/n @Nikunj_Parashar @Tardidtech @AshishSinghNews
The Shipbuilding Financial Assistance Policy (SBFAP) 2.0 (for direct subsidies to shipyards) has an outlay of ₹18,090 cr. 20% subsidy for normal ships, 25% for special category (incl oil, gas, chemical tankers & container ships) & 30% for green / ships with futuristic tech. 10/n
Further, Basic Customs Duty (BCD) exemption on raw materials, components, consumables or parts used in ship- building / breaking will be extended for further 10 years from April 2025. This along with the other measures will strengthen shipbuilding and create jobs. 11/n
Large ships have been added to Infrastructure Harmonised Master List (HML). This makes them eligible for many benefits (easier access to long-term financing, tax incentives). This will also enhance fleet modernisation and increase fleet size by attracting pvt investment. 12/n
To boost inland waterways, the ‘Tonnage Tax Scheme’ has now been extended to Inland vessels. Vessels will be taxed on capacity instead of profit. This further incentivises investment in inland waterways vessels by making them financially more viable. 13/n
Other measures such as the extension of PM GATI SHAKTI Portal to pvt players will also help transportation by bringing efficiency in cargo movement via multi modal infra planning. This will lower logistics costs and will certainly have spinoff effects on many other sectors. 14/n
To sum up…while the news for startups (covered earlier) was GREAT, for the maritime sector it is a DREAM budget. Hon’ble Finance Minister @nsitharaman must be applauded for many long-term, strategic measures. ‘VMT’ & ‘BZ’ in naval terminology! n/n @Kbsingh03 @geethashok
It has been DREAM budget from the maritime perspective (as covered👆🏻) @sanjeevsanyal @SandeepUnnithan @pssudaykiran @yogiat007 @srikantkesnur @AjendraBs @abhilashtomy @Urmimala_A @anuragbisen @AJS_subdriver @LaxmanKBehera @mananbhattnavy @acorn @horror06 @VGK_India @YusufDFI