Japan’s largest shipbuilder Imabari eyes opportunities in Andhra Pradesh

 The meeting comes a couple of days after the Union Budget announced a slew of measures to promote India’s shipbuilding sector. In December, the Andhra Pradesh government finalised a maritime policy, including for shipbuilding.

Founded in 1901 and privately owned by the Higaki family, the group builds ships from 10 yards in Japan. The shipbuilder based in Imabari, Ehime Prefecture, Japan, has constructed over 2,940 ships since inception…The state is seeking to supplement the Centre’s efforts to promote the shipbuilding and repair industry.

The shipbuilding policy of Andhra Pradesh aims to provide exemptions from Customs duties on raw materials, tax credits on R&D investments in green technologies and ecofriendly vessels, subsidies on shipbuilding costs for indigenous ships, interest rate subventions on loans for new shipbuilding projects, subsidy of 2-5% on goods and services procured from MSMEs registered in AP, provision of access to water and electricity @50% subsidized rate for a period of 10 years and an increase @10% on Y-o-Y basis for the subsequent 5 years, up to 10% cargo charge exemption for shipbuilding raw materials, one-time reimbursement of full stamp duty and registration fee for establishment of new shipbuilding, ship repair and ancillary units, SGST exemption on shipyard construction inputs, SGST waiver on shipyard-made ships and vessels for 7 years and exemption from electricity duty for the first 10 years of operations for shipyards as well as ancillary industries in the identified clusters.

The development of shipbuilding and ship repair facilities in Andhra Pradesh will be based on three models. This includes developing yards at greenfield landlord ports such as Ramayapatnam, Machilipatnam, and Mulapeta which are under construction, and any other greenfield ports developed in the future...The second model deals with shipyard development at operational private ports under APMB such as Gangavaram, Kakinada Anchorage, Kakinada Deep Water, Rawa and Krishnapatnam. Under this model, the concessionaire (private developer) will have the flexibility to develop shipyards either independently or in partnership with other entities (through sub-licensing).

The third model involves setting up shipyards on a standalone basis.

In the Budget presented to Parliament on 1 February, Finance Minister Nirmala Sitharaman announced a Rs25,000 crore Maritime Development Fund (MDF), a revamped shipbuilding financial assistance policy to address cost disadvantages faced by Indian yards, credit note scheme for shipbreaking in Indian yards to promote circular economy and infrastructure status to large ships above a specified size. The FM also said that shipbuilding clusters will be facilitated to increase the range, categories and capacity of ships. This will include additional infrastructure facilities, skilling and technology to develop the entire ecosystem. Sitharaman said that the exemption from Basic Customs Duty (BCD) on raw materials, components, consumables or parts used in the manufacture of ships and import of vessels for recycling will be extended for a further ten years from 1 April 2025.

India holds less than 1 percent of the global shipbuilding market but aims to break into the top 10 ranking by 2030 and top 5 by 2047.