India’s plans to restructure its shipbuilding sector by venturing into construction of more complex ships will see an investment into Cochin yard worth USD 442 million (Rs 1,200 crore).
The investment will be assigned for building a dry-dock for LNG ship construction, according to India’s shipping minister Nitin Gadkari.
Indian shipbuilders still lag behind their competitors in building specialized ships, such as cryogenic LNG carriers, so it may take them longer to overcome the technological challenges, as first estimates indicate it would take up to six years to build these indigenously.
The country’s shipping ministry has launched discussions with financial institutions such as IFCI and IDBI to establish a fund of as much as Rs.15,000 crore to extend low-cost loans to shipbuilders.
The fund is aimed at promoting local shipbuilding and attracting foreign investments to Indian shipyards which are having various difficulties in keeping up with the competition.
Having in mind that Japanese, Chinese and Korean competitors enjoy various financial benefits from their governments, India has decided to follow in their footsteps.
The first ships of this kind could be Gail’s newbuilds, which committed to built a third of its newbuild batch indigenously.
Gail has inked long term agreements with the US based companies Cheniere Energy Partner and Dominion Resources for transportation of LNG from Sabine Pass and Cove Point terminals in USA.