10-year exemption from customs duty proposed for raw material for ship building; similar exemption for ship breaking.
Published Feb 01, 2025 | 8:19 PM ⚊ Updated Feb 01, 2025 | 8:19 PM
Union Finance Minister Nirmala Sitharaman has proposed releasing the untapped potential of the maritime sector. In her 2025-26 budget speech on Saturday, 1 February, in Parliament, she underscored the point that India ranked second globally in fish production and aquaculture and that it accounted for ₹60,000 crore worth seafood.
The union finance minister said that an enabling framework would be put in place for harnessing the fishery wealth of the Indian Exclusive Economic Zone and High Seas, with special focus on Anadaman & Nicobar and Lakshadweep Islands.
For long term financing for the maritime industry, a maritime development fund with a corpus of ₹25,000 crore would be set up. The fund will have up to 49 percent as contribution from the government and the balance will be from ports and the private sector.
This apart, the union minister announced that the Shipbuilding Financial Assistance Policy will be revamped to address cost disadvantages. This will also include credit notes for ship-breaking in Indian yards to promote the circular economy. Large ships above a specified size will be included in the infrastructure harmonised master list (HML).
Ship building clusters will be facilitated to increase the range, categories and capacity of ships. It will include additional infrastructure facilities, skilling and technology to develop the entire ecosystem.
As far as the shipping sector is concerned, the minister said that considering the fact that shipbuilding has a long gestation period, she was exempting raw materials, components, consumables or parts for the manufacture of ships from basic customs duty for another 10 years.
She also proposed the same dispensation for ship breaking to make it more competitive. To enhance India’s competitiveness in the global seafood market, she proposed to reduce basic custom duty (BCD) from 30 percent to 5 percent on frozen fish paste (surimi) for manufacture and export of its analogue products.
She said she was proposing to reduce BCD from 15 percent to 5 percent on fish hydrolysate for manufacture of fish and shrimp feed. To promote development of domestic Maintenance, Repair and Operations (MRO), the minister extended by one year the time limit from six months, for export of foreign origin goods that were imported for repairs, for railway goods. Last year it was for aircraft and ships.
The minister announced reduction in customs duty to reduce input costs, deepen value addition, promote export competitiveness, correct inverted duty structure, and boost domestic manufacturing. The reduction will be from 10 percent to 7.5 percent for chemicals – compounds containing a pyrimidine ring (whether or not hydrogenated) or piperazine ring in the structure.
Also there will be reduction from 100 percent to 20 percent for synthetic flavouring essences and mixtures of odoriferous ubstances of a kind used in food or drink industries.
There will also be a reduction from 39 percent to 20 percent on Sorbitol. Sorbitol is a sugar alcohol (polyol) used for various purposes in different industries, as a sweetener in sugar-free products like chewing gum, candies, and diabetic-friendly foods and as humectant and stabiliser to help retain moisture in baked goods, chocolates, and processed foods.
(Edited by Rosamma Thomas)
