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Govt extends subsidy scheme for promotion of flagging of merchant ships until FY31

08 May 2026 Evaluate

In a significant move to enhance the nation's share in global shipping, the Ministry of Ports and Shipping has extended the subsidy scheme for the promotion of flagging of merchant ships in India for a further period of five years until the financial year 2030-31. 

In order to achieve the objective of Atmanirbhar Bharat, in July 2021, the Union Cabinet approved a scheme with an outlay of Rs 1,624 crore over five years. This scheme aims to provide subsidies to Indian shipping companies participating in global tenders issued by Ministries and Central Public Sector Enterprises (CPSEs) for importing government cargo such as crude oil, LPG (Liquid Petroleum Gas), Coal, and Fertilizers. Finance Minister Nirmala Sitharaman, in her Union Budget for 2021-22 speech, had announced a scheme. 

According to the scheme, for a ship flagged in India after February 1, 2021, which is less than 10 years old at the time of flagging, a subsidy is given at 15 per cent of the quote offered by the lowest bidding foreign company (LI), or the actual difference between the quote offered by the Indian-flagged vessel exercising Right of First Refusal (ROFR) and the quote offered by the L1 foreign company, whichever is less.

For existing Indian-flagged ships aged less than 10 years on February 1, 2021, the subsidy support would be extended at 10 per cent of the quote offered by the L1 foreign bidder, or the actual difference between the quote offered by the Indian-flagged vessel exercising ROFR and the quote offered by the L1 foreign company, whichever is less. Ships older than 20 years are not eligible for any subsidy under the scheme.


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