Union Shipping Minister GK Vasan informed Lok Sabha that the government took several steps to support shipping sector in the last several years.
Specifically, the government introduced the tonnage tax system during 2004-05 to provide a level playing field to the Indian shipping sector.
The system effectively brought down the tax liability of shipping companies to a level comparable to the international levels from the previous levels of the corporate tax regime.
The government reserved Indian Coasting Trade for Indian flag vessels through incorporation of cabotage regulations in the Merchant Shipping Act, 1958 under sections 406 and 407.
It also provided cargo support to the industry in the form of right of first refusal and the policy of Free On Board (FOB) import is being followed for government owned or controlled cargoes, he said.
These measures contributed to an increase in the Indian tonnage by 3.5 million gross tonnage (mn gt) during the period from 2004 to 2011, the minister informed.
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