Infrastructure Status Granted To Large Commercial Ships, Excluding Smaller Coastal Vessels

2025-09-22 02:08:53

(MENAFN- KNN India) New Delhi, Sep 22 (KNN) The Ministry of Finance on September 19 announced that Indian-owned and flagged commercial ships with a gross tonnage (GT) of 10,000 and above, or Indian-built, owned, and flagged ships of 1,500 GT or more, will be granted infrastructure status.

The move allows qualifying fleet owners to access long-term, low-cost funding for ship acquisition, a long-pending demand of the shipping industry.

While the decision has been welcomed as a step forward, stakeholders have raised concerns over the exclusion of smaller vessels that operate exclusively along the coast, including those supporting ports and the offshore oil industry.

Rakesh Singh, President, Indian Coastal Ship Owners' Association, highlighted that out of roughly 1,500 ships registered under the Merchant Shipping Act, about 500 smaller coastal vessels - including tugs, dredgers, and offshore support ships - will not qualify for infrastructure benefits.

“These vessels are the backbone of ports and offshore oil operations. Leaving them out defies logic,” Singh said, according to ET.

The government had committed in the Union Budget 2025 to include large ships above a specified size in the infrastructure harmonised master list, but the Finance Ministry's criteria have deviated from shipowners' recommendations, which proposed 24 meters in length or 500 GT as benchmarks.

Singh noted that the current criteria are not fully aligned with the Coastal Shipping Act, the Maritime Vision 2030, or the Maritime Amrit Kal Vision 2047, which aim to promote coastal shipping and strengthen domestic shipbuilding.

Industry observers said the exclusion of smaller coastal and inland vessels may limit the benefits of infrastructure status for a significant portion of the fleet, including vessels that had been granted tonnage tax benefits under the Inland Vessels Act, 2021.

Singh added that the decision is inconsistent with broader government initiatives to support MSMEs and domestic manufacturing, which Prime Minister Modi highlighted as crucial to India's self-reliance in his recent address.

(KNN Bureau)

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