Indian shipping ministry is seeking approval for extension of the shipbuilding subsidy scheme by another five years to 2012. The ministry will also look into the level of subsidy to be given.

Ministry was seeking another extension as it thought that the industry still needed government support to compete with foreign shipbuilding companies.

A 35% shipbuilding subsidy scheme was introduced in 1997 for a period of five years for public sector shipyards in the country. It was extended for another five years till 2007 and the government then allowed the private sector yards to claim the subsidy. The subsidy was reduced to 30% during this period.

Under the current policy, 30% subsidy on the bid price is available to the shipyards on domestic orders obtained through a global tendering process for the construction of sea-going minimum 80 meter long merchant vessels and for the export orders obtained through a global tendering process or otherwise for the construction of any type of vessel.