India Unveils Ambitious Shipbuilding Financial Assistance Scheme
MUMBAI: The Ministry of Ports, Shipping and Waterways has announced new guidelines for a comprehensive shipbuilding financial assistance scheme, part of a ₹69,725 crore initiative approved by the Union Cabinet in September. This scheme aims to position India among the world’s top ten nations in ship ownership and shipbuilding by 2030, with a target of reaching the top five by 2047. The guidelines, finalized on December 26, outline the framework for developing greenfield shipbuilding clusters and expanding existing shipyards.
Key Features of the Shipbuilding Financial Assistance Scheme
The Shipbuilding Financial Assistance Scheme (SBFAS) will apply to contracts signed between September 24, 2025, and March 31, 2036. The scheme allocates ₹20,416 crore specifically for constructing large, green, and specialized vessels. For smaller vessels costing up to ₹100 crore, financial assistance is capped at 15% of the actual value. For larger vessels exceeding ₹100 crore, assistance will be 15% on the first ₹100 crore and 20% on the remaining cost. Specialized vessels will receive 15% on the first ₹100 crore and 25% on the remainder.
Financial aid will be disbursed in three stages: 30% during keel laying, 40% upon launching, and the remaining 30% upon delivery, with security measures in place. The scheme also extends to vessels ordered by government entities, with fair pricing determined through open tenders or valuation processes. Export orders for defense forces will have a financial assistance cap of ₹200 crore per vessel, with an overall limit of ₹2,000 crore for all such vessels under the scheme.
To qualify for financial assistance, vessels must be constructed and delivered within specific timelines, ranging from four years for one or two vessels to six years for three or four vessels. Additionally, provisions are in place for extensions due to unforeseen circumstances, such as natural disasters or pandemics.
The scheme also introduces a ‘Shipbreaking Credit Note‘ for vessels scrapped in compliant Indian ship recycling yards, allowing owners to redeem credits towards new ship orders. This initiative is part of a broader strategy to enhance India’s shipbuilding capacity and infrastructure, including the establishment of greenfield shipbuilding clusters across the country. Each cluster will feature extensive facilities and is expected to significantly boost India’s shipbuilding output in the coming years.
