The Reserve Bank of India (RBI) has updated Foreign Exchange Management (Export of Goods & Services) Regulations, exempting tugboats, dredgers, and offshore support vessels from submitting Export Declaration Forms (EDF). Additionally, the RBI has raised the maximum advance remittance for ship imports from $5 million to $50 million, allowing for more flexibility without requiring a standby letter of credit or bank guarantee. This adjustment aligns the shipping sector’s financial conditions with those of the aviation industry.
These reforms address long-standing concerns from Indian shipowners and maritime service providers, advocated by the Directorate General of Shipping, and signify a commitment to improving the ease of doing business in maritime operations. By removing the EDF requirement for non-cargo ships, which previously took around 15 days, India aims to attract global maritime players.
The changes particularly benefit foreign dredging companies that have hesitated to operate under the Indian flag due to bureaucratic barriers. Shipowners emphasize that this procedural relief is crucial for enhancing competitiveness in the offshore vessel segment.
Furthermore, the raised remittance limit facilitates higher deposits in second-hand ship purchases, crucial for negotiating better terms. This marks a significant shift in supporting India’s shipping industry.
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