News Brief
Japanese Shipping Giant MOL Eyes Gujarat's GIFT City For Ship Leasing Unit, Here's All About It
An MOL ship. (Representative image)
Mitsui OSK Lines (MOL), a major Japanese shipping company and the world’s third-largest ship owner, is reportedly planning to establish a unit in Gujarat International Finance Tec-City (GIFT City) for ship leasing and ownership.
Additionally, MOL is in discussions with Larsen & Toubro (L&T) to construct an oil tanker at its Kattupalli yard near Chennai under the 'Make in India' initiative, as per a report by The Economic Times.
GIFT City, India's first International Financial Services Centre (IFSC), aims to facilitate tax-free offshore business within India.
MOL intends to use its proposed GIFT City entity for leasing or building vessels in India, potentially including ships constructed locally under 'Make in India'.
According to the same report, MOL will initially focus on leasing ships, which will fly foreign flags.
However, if the company builds a ship in India, it will be registered under the Indian flag.
MOL has held preliminary talks with local yards for building a tanker, with L&T's Kattupalli yard being the primary option due to limited availability elsewhere.
To mitigate risks associated with constructing complex ships, MOL plans to start with a simple ship, such as a medium-range oil tanker, under 'Make in India'.
This strategy aims to ensure adherence to construction schedules and avoid challenges associated with unfamiliar technologies. MOL's decision to consider India for shipbuilding reflects its belief in L&T's ability to deliver quality vessels within agreed timelines and costs.
MOL's investment in setting up a unit in IFSC GIFT City aligns with India's efforts to attract global fleet owners and boost its shipping tonnage. The move is expected to benefit from various tax incentives and exemptions offered by IFSCA to promote ship leasing activities.
The establishment of MOL's unit in GIFT City is seen as a significant development that could bolster India's maritime sector and encourage more global shipping companies to invest in the country.
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