In response to queries from ET, the Department of Transport said 95 applications had been received so far for approval in principle for 170 vessels with a contract value of Rs 2,620 crore.

The policy guidelines have been in effect since April 1, 2016 and will apply to shipbuilding contracts signed between April 1, 2016 and March 31, 2026.

“The aim of the policy is to make domestically produced vessels competitive with Chinese vessels. So far, we have not rejected any application for financial assistance under the policy,” said one. responsible to ET on condition of anonymity. “Shipyards will need to make their own investments if they intend to undertake capacity expansion. The purpose of the policy is to support specific shipbuilding projects.”

Under SBFA policy, 21 shipyards of varying capacities have signed up for the program. Major companies registered under the scheme include L&T Shipbuilding Ltd, Cochin Shipyard Ltd, Titagarh Wagons Ltd and Goa Shipyard Ltd.

“Financial assistance is provided to Indian shipyards equal to 20% of the lowest contract price or fair price or actual payments received for each vessel built by them for a period of at least 10 years from 2016- 2017. This rate of 20% will be reduced by 3% every three years”, indicates a press release from the Ministry of Transport.

Under the policy, only vessels built and delivered within three years of the contract date will be eligible for financial assistance. In the case of specialized vessels, the Center may grant approval in principle for the construction and delivery of such vessels for a maximum period of six years.

Prior to the current policy, the Center had a shipbuilding grant scheme for Indian shipyards, which expired in 2007. were only obtained on the basis of a global call for tenders. Export orders were also eligible for the subsidy.