The central government is set to withdraw trading licences for oil tankers and bulk carriers that are over 25 years old, the Directorate General of Shipping said in an order.

The average age of Indian fleet has been increasing in the recent years, bucking a global declining trend. "Age norms will assist in ensuring gradual phasing out of fossil fuel ships and ushering of alternate/low carbon energy efficient ships," according to the order.

The move comes as a bid to significantly reduce greenhouse gas emissions and cut the average age of the fleet, according to a report by Livemint. 

The government notification also bans acquisition of such vessels that are over two decades old. According to the current norms, vessels that are less than 25 years old can be acquired without any technical clearance.

The order said there is a need to modernise the Indian fleet, which requires extensive review of the requirements of the registration and operation of the ships.

The regulation requires oil tankers that are older than 15 years to improve their working condition and subjects bulk carriers to additional checks to ensure adherence to high international standards.

The country aims to offer cash subsidies, lower taxes and other incentives to bolster its shipbuilding industry. The developments include subsidies encouraging construction of new vessels, and incentives to build small vessels and promote battery-driven small vessels to cut carbon emissions.

As many as 35 shipbuilding companies are there in the country. This includes some state-owned companies too. Despite lower costs of manufacturing, local tax rules deter investment in the country's shipping industry.

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