Letters of credit (L/Cs) should become easier to obtain for beleaguered shipbreakers in the Indian state of Gujarat.

This is because the state government has announced a revised ship recycling policy in a bid to salvage its dwindling shipbreaking sector, which is struggling with low scrap prices and margins, high expenses and a lack of finance.

Flexible terms

One measure calls for the lease terms granted to shipbreakers to be increased from five to ten years.

This extra security of land tenure should enable them to obtain L/Cs from banks "much more easily" according to one local shipbreaker.

Plot changes

Other measures to be introduced by the state government include enabling shipbreakers to resize, realign and readjust plot sizes more easily.

This flexibility is an important requirement as the size of plot required changes according to changes in the size of vessels that come in for breaking.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.