Shipping stocks are rallying up in trade today after the reports of an important announcement for the shipping industry in budget 2024.
Shares of shipbuilding companies climbed high in today’s session as according to Zee Business report the shipping industry is likely to receive a big boost in the upcoming Union Budget 2024-25.
GE Shipping, Mazagon Dock Shipbuilders and other shipping stocks are in focus as according to sources the industry may get a big boost in the upcoming budget with the extension of the Shipbuilding scheme beyond 2026.
Under the scheme, up to 20 per cent financial assistance is given. Also, there is a possibility of the announcement of a Budget Maritime Development Fund, according to Zee Business report.
Why Are Shipping Stocks Trading High Today?
Stocks like Garden Reach Shipbuilders (GRSE) were up over 4 per cent, Essar Shipping up 10 per cent, Mazagon Dock Shipbuilders up 3 per cent and GE Shipping were up over 4 per cent.
The Ministry of Ports, Shipping and Waterways had earlier introduced the Shipbuilding Financial Assistance Policy (SBFAP) scheme for Indian shipyards to procure orders from domestic as well as international markets. It will also help them to be competitive in the international market and secure orders overseas. Government also wanted to promote the “Make in India” policy and support the shipbuilding industry in India, Under which the shipbuilding scheme the companies receive up to 20 per cent financing which can be extended beyond 2026 in Union Budget 2024.
Indian Shipyards who signed shipbuilding contracts between April 1, 2016 and March 31, 2026 get financial assistance starting from 20% in 2016 and diminishing to 11% in 2026. But according to the current report the scheme can be continued after 2026 and will continue its financial support up to 20 per cent.
The announcement of the Maritime Development Fund is also likely in the upcoming budget which will help the shipping sector to secure funding at discounted rates.
Harit Nauka Scheme
There can be an announcement of Harit Nauka Scheme in the upcoming budget.
The Harit Nauka initiative is a program launched by the Ministry of Ports, Shipping, and Waterways that aims to promote the adoption of greener technologies in inland waterway vessels. It focuses on shifting inland vessels towards sustainable alternatives, such as hydrogen fuel cells, to reduce environmental impact.
Under the scheme, the government is aiming to provide 1000 green boats with subsidy every year and the scheme can be launched in December this year after the announcement in the upcoming budget, according to the reports.
(Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)