IMO requires ships to use fuels with sulphur content of no more than 0.5%, unless they are equipped with scrubbers.
According to Reuters, some Indian refiners, including Indian Oil Corp and Hindustan Petroleum Corp, are making VLSFO to meet demand. However, this fuel is not available at every Indian port, indicating the need for imports.
For this reason, and to reduce costs for local shipping companies, India decided to exempt VLSFO used by ships from import tax.
Rahul Bhargava, executive director at Essar Shipping, commented on the decision, saying that it will help cope with demand, as there is a shortage of fuel for coastal movement of ships.