Chartering Under Revised Guidelines – Ships Built In India To Get Priority

Why in News?

  • The government has revised guidelines for chartering of ships by providing the right-of- first-refusal to ships built within the country, a move to Ships built in India to get priority in chartering under revised guidelines and to promote the Make in India initiative and incentivise shipbuilding activity.
  • Earlier, the right of first refusal was reserved for Indian flag vessels as per relevantprovisions of the Merchant Shipping Act 1958.


  • Now when a tendering process is undertaken to charter a vessel, a bidder offering a ship built in India will be given the first priority to match L1 quote.
  • It is exected that the initiative will increase the demand for such vessels, providing then with additional market access and business support.
  • The review is also in line with the need to give a long term strategic boost to the domestic shipbuilding industry.
  • The shipping ministry has also laid down eligibility conditions and rules for exercise of the RoFR.
  • One of the rules says: “The RoFR would be exercised only in case the vessel being offered for charter by the lowest bidder has been built outside India.”
  • The government has taken several steps to promote shipbuilding in India, especially by providing long-term subsidy under the Shipbuilding Financial Assistance Policy (2016- 2026).
  • Budgetary provision of $30 crore was earmarked in 2018-19 for providing financial assistance to all Indian shipyards, excluding Defence Shipyards.
  • An amount of $11.89 crore has already been disbursed to three shipyards.
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