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Home » IANS » ROFR conditions for chartering of vessels amended, Indian flavour a must

ROFR conditions for chartering of vessels amended, Indian flavour a must

By IANS
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New Delhi, Oct 22 (IANS) To promote demand for ships built and registered in the country, the government has made it mandatory for companies to charter only Indian-made, flagged or owned vessels and consider other options only as a last resort.

The Shipping Ministry has amended the ROFR (Right of First Refusal) licensing conditions for chartering of vessels that has given three option to companies.

The first preference on chartering vessels has to go in any case to Indian-built, Indian-flagged and Indian-owned ships.

If this condition is not being met, the next preference should go to foreign-built but Indian-flagged and Indian-owned vessels. And as a last resort, preference should be given Indian-built vessels that are foreign-flagged and foreign-owned.

In all the options, the government has included some Indian preference as part of the exercise to promote the Indian shipping industry under its Aatmanirbhar Bharat initiative.

Indian-flagged vessels are those that are registered in India. With the changes in the ROFR guidelines, the government wants to ensure that in any case Indian entities get preference.

The ROFR guidelines earlier as well provided a preference for vessels built in India, flagged in India and owned by Indians as these had the first right of refusal on any chartering deals. But now fresh options have been provided to ensure that even if vessel is not made in India, it is either flagged here or owned by Indians.

According to the Shipping Ministry guidelines, all vessels flying the flag of India up to the date of issue of new circular by the Director General of Shipping shall be deemed to be Indian-built vessels and will fall in category one, ie Indian-made, flagged and owned.

Also, to promote Indian shipbuilding, an Indian-owned entity would be permitted to charter a foreign flagged vessel temporarily, if it is already building a ship in an Indian shipyard for registration under the Indian flag. For this case to become option one, it has to be seen that 25 per cent of the contract money has to been paid to the Indian shipyard and 50 per cent of the hull fabrication has been completed.

The Shipping Ministry has made provision for long-term subsidy for shipbuilding activities under its shipbuilding financial assistance policy (2016-2026), and has already disbursed an amount of Rs 61.05 crore till date under this policy.

It is an endeavour of the government to further incentivise shipbuilding by providing additional market access and business support to ships built in India, a ministry statement said.

“Ministry of Shipping is working with a focused approach to promote shipbuilding in India as per Aatmanirbhar Bharat vision of our Prime Minister Narendra Modi. The revision of RoFR licensing conditions is a giant step towards Aatmanirbhar Shipping. It will promote ‘Make in India’ initiatives through self-reliance and will give a strategic boost to domestic shipbuilding industries, contributing towards long-term economic growth of India,” Shipping Minister Mansukh Mandaviya said.

–IANS

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(This story has not been edited by Newsd staff and is auto-generated from a syndicated feed.)
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