Syllabus: GS3/ Infrastructure
In News
- The Ministry of Finance has finally given infrastructure status to large ships, meeting one of the shipping industry’s longest-standing demands.
About
- Large ships are defined as Indian-owned and flagged commercial vessels with a gross tonnage of 10,000 or more, or Indian-built, owned, and flagged commercial ships of 1,500 gross tonnage or more.
- The Ministry of Finance included “large ships” in the harmonized master list of infrastructure sectors under the “Transport and Logistics” category, making them eligible for all benefits accorded to infrastructure projects.
Significance of Inclusion
- Enables access to infrastructure lending under easier terms, including higher limits on loans.
- Facilitates access to larger external commercial borrowings (ECB).
- Opens up opportunities for viability gap funding and tax incentives.
Status of India’s Shipping Sector
- India has an approximately 11,099 km long coastline, with 13 major ports and over 200 non-major ports.
- India accounts for ~1.3% of world fleet tonnage, despite handling ~95% of its trade by volume and ~70% by value through maritime routes.
- India is the largest supplier of seafarers after the Philippines, contributing nearly 10% of global seafarers, and ranks among top 5 nations in officer supply.
Challenges
- Low Indian-flag share: Over 70% of India’s cargo is carried on foreign ships, raising freight bill vulnerabilities (~$75 billion annually).
- Shipbuilding constraints: High input costs, lack of scale, limited financing support, competition from East Asian yards.
- Port efficiency gaps: Though improving, turnaround time still lags behind global leaders like Singapore and China.
Recent Developments (2024–25)
- Launch of India Middle East Europe Economic Corridor (IMEC), boosting the importance of Indian ports.
- India joined IMO’s Green Voyage 2050 programme, committing to sustainable shipping.
- Sagarmala Project: Focused on port modernisation, connectivity, port-linked industrialisation, and coastal community development.
- Maritime India Vision (MIV) 2030: Roadmap for ₹3 lakh crore investment, aiming to increase Indian flag tonnage to 23 million GT by 2030.
- Amrit Kaal Maritime Vision 2047: Seeks to make India a global maritime hub with focus on green shipping, digitalisation, and cruise tourism.
- Growth in cruise tourism: The passenger traffic crossed the 1 million mark in 2024, aided by Mumbai, Kochi, Goa cruise terminals.
Source: TH
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