India Launches Major Shipbuilding Initiatives with Over ₹44,700 Crore Investment
The Government of India has unveiled comprehensive guidelines for two significant shipbuilding initiatives, collectively valued at over ₹44,700 crore. The Ministry of Ports, Shipping and Waterways (MoPSW) announced the Shipbuilding Financial Assistance Scheme (SBFAS) and the Shipbuilding Development Scheme (SbDS) as part of a strategic effort to position India as a global maritime leader. These initiatives aim to revitalize domestic shipyards and strengthen industrial connections within the sector.
The SBFAS, with a budget of ₹24,736 crore, is designed to boost immediate ship production. Under this scheme, the government will offer financial assistance ranging from 15% to 25% per vessel, employing a tiered support system tailored for small, large, and specialized vessels. A notable feature of the SBFAS is the establishment of a National Shipbuilding Mission, a new entity tasked with coordinating planning and execution across the shipbuilding sector. Additionally, in a move promoting a circular economy, ship owners who scrap vessels at Indian yards will receive a shipbreaking credit note equivalent to 40% of the scrap value, which can be applied toward the construction of new ships. Economically, the SBFAS is expected to support projects worth approximately ₹96,000 crore over the next decade, significantly enhancing domestic manufacturing and creating job opportunities.
Infrastructure and Innovation Focused on Shipbuilding Development
Complementing the SBFAS, the Shipbuilding Development Scheme (SbDS) has an allocation of ₹19,989 crore and is aimed at fostering infrastructure and innovation within the shipbuilding industry. This scheme provides 100% capital support for common infrastructure in greenfield shipbuilding clusters through a 50:50 Centre-State special purpose vehicle. Existing shipyards are also eligible for 25% capital assistance for brownfield expansions, which will focus on essential upgrades such as dry docks, shiplifts, and automation.
To further enhance the technical ecosystem, the government plans to establish an India Ship Technology Centre under the Indian Maritime University. This center will lead research, design, and skill development initiatives, ensuring that the workforce is equipped with the necessary skills to meet the demands of modern shipbuilding.
Financial Resilience and Future Projections for Indian Shipbuilding
To mitigate the financial risks associated with large-scale maritime projects, the government has introduced a credit risk coverage framework. This framework provides government-backed insurance for pre-shipment, post-shipment, and vendor-default risks, thereby improving the bankability of Indian shipbuilding projects.
The Ministry of Ports, Shipping and Waterways projects that these initiatives will elevate India’s commercial shipbuilding capacity to 4.5 million gross tonnage per annum by the year 2047. Both the SBFAS and SbDS are set to remain operational until March 31, 2036, with plans for an in-principle extension through 2047. These initiatives mark a significant step towards transforming India into a formidable player in the global maritime industry.
