The government has granted infrastructure status to the shipyard industry in a boost to its Make in India initiative. The move is expected to bring down borrowing costs for the industry. At present, companies pay average interest of 14-15 per cent on their borrowings.
´Shipyards industry has been granted infrastructure status. It will create right environment for the growth of shipbuilding industry that would now become globally competitive´ a senior shipping ministry official said.
Infrastructure status will also give a boost to government´s ´Make in India´ initiative and is expected to help the industry raise its share in global market to 5 per cent by 2020 from less than 1 per cent now.
Indian shipbuilders carry a minimum cost disadvantage of about 30 per cent on the price of a ship. The promotion of the shipbuilding and ship repair industry in India will lead to higher multiplier effect on investment and turnover (11.6 and 4.2) and high employment potential due to multiplier effect of 6.4.