Infrastructure Status for Large Ships

Context

One of the shipping industry’s longest-standing requests has now been fulfilled with the Ministry of Finance’s decision to grant infrastructure status to large ships.

Key Highlights

• Indian-owned and flagged commercial ships with a gross tonnage of 10,000 or higher, as well as Indian-built, owned, and flagged commercial ships, are considered large ships. with a gross tonnage of at least 1,500 tons.
• The Ministry of Finance included “large ships” in the harmonized master list of infrastructure sectors under the “Transport and Logistics” category, which makes them eligible for all advantages granted to infrastructure initiatives.

Importance of Inclusion

• Makes it easier to get infrastructure financing, such as loans with larger limits.
• Makes it easier to obtain more ECBs from foreign markets.
• Creates prospects for tax breaks and viability gap funding.

State of the Shipping Industry in India

• With more than 200 minor ports and 13 significant ports, India’s coastline is around 11,099 kilometers long.
• Even though 70% of its commerce by value and 95% by volume is transported via maritime routes, India only has about 1.3% of the world’s fleet tonnage.
• With around 10% of the world’s seafarers, India is the second-largest provider of seafarers after the Philippines, and it is one of the top five countries in terms of officer supply.

Issues

• Low proportion of Indian flags: More than 70% of India’s cargo is transported on foreign ships, which increases the risk of freight bills (around $75 billion per year).
• Restrictions on shipbuilding: competition from East Asian yards, limited financial assistance, lack of scale, and high input costs.
• Gaps in port efficiency: Despite improvements, turnaround time continues to lag behind top global performers like Singapore and China.

Recent Updates (2024–25)

• The significance of Indian ports is increased by the introduction of the India Middle East Europe Economic Corridor (IMEC).
• The Sagarmala Project which aims to modernize ports, improve connectivity, promote port-linked industrialization, and advance coastal community development.
• Maritime India Vision (MIV) 2030: Roadmap for a ₹3 lakh crore investment, to increase the tonnage of the Indian flag to 23 million GT by 2030.
• Amrit Kaal Maritime Vision 2047: Strives to transform India into a center of maritime activity with an emphasis on cruise tourism, digitalization, and green transportation.
• Expansion of cruise tourism: With the help of the cruise ports of Mumbai, Kochi, and Goa, passenger volume surpassed 1 million in 2024.

Source: The BS

Mains PYQ

(Q) “Investment in infrastructure is essential for more rapid and inclusive economic growth.” Discuss in the light of India’s experience. (2021)

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