India Launches Major Shipbuilding Initiatives
New Delhi: The Ministry of Ports, Shipping and Waterways (MoPSW) has unveiled two significant shipbuilding initiatives, collectively valued at over Rs 44,700 crore. These programs, the Shipbuilding Financial Assistance Scheme (SBFAS) and the Shipbuilding Development Scheme (SbDS), aim to enhance the nation’s shipbuilding capabilities and boost its competitiveness on the global stage, according to an official announcement.
Key Features of the Initiatives
The SBFAS, with a financial corpus of Rs 24,736 crore, will offer financial support ranging from 15% to 25% per vessel, depending on its classification. This initiative is designed to stimulate domestic shipbuilding by providing graded support for various types of vessels, including small, large, and specialized ships. Disbursements will be linked to specific milestones, ensuring that funds are allocated efficiently and responsibly.
Meanwhile, the SbDS, which has a budget of Rs 19,989 crore, focuses on long-term capacity building and the enhancement of shipbuilding capabilities. Union Minister Sarbananda Sonowal emphasized that these guidelines establish a transparent framework that will invigorate the domestic shipbuilding sector, fostering both forward and backward linkages within the industry. The initiatives also include incentives for series orders, which are expected to further stimulate production.
Additionally, the establishment of a National Shipbuilding Mission is planned to coordinate the execution of these initiatives effectively. A notable feature of the scheme is the introduction of a shipbreaking credit note, allowing ship owners who scrap vessels at Indian yards to receive a credit equivalent to 40% of the scrap value. This approach not only promotes ship recycling but also supports a circular economy model.
Future Prospects and Infrastructure Development
According to the official statement, independent valuations and milestone-based assessments will be mandatory to enhance governance and ensure the judicious use of public funds. Over the next decade, the SBFAS is projected to facilitate shipbuilding projects worth approximately Rs 96,000 crore, thereby stimulating domestic manufacturing and creating jobs across the maritime sector.
The initiatives also aim to develop greenfield shipbuilding clusters, modernize existing brownfield shipyards, and establish an India Ship Technology Centre under the Indian Maritime University. This center will focus on research, design, innovation, and skills development, further strengthening the workforce in the maritime industry.
Under the SbDS, greenfield shipbuilding clusters will receive full capital support for essential maritime infrastructure through a 50:50 Centre-state special purpose vehicle. Existing shipyards will be eligible for 25% capital assistance for critical infrastructure upgrades, including dry docks and automation systems. With these advancements, India’s commercial shipbuilding capacity is expected to reach approximately 4.5 million gross tonnage per annum by 2047.
Both the SBFAS and SbDS will remain operational until March 31, 2036, with a potential extension until 2047. Together, these schemes are anticipated to generate significant employment opportunities, promote indigenous technology development, and enhance India’s maritime security and economic resilience.
