India Revamps Ship Building Assistance Policy to Boost Local Content
The Ship Building Financial Assistance scheme in India is set to undergo a significant transformation to address cost disadvantages and promote local content in ship construction. Finance Minister Nirmala Sitharaman announced key reforms in her Budget speech to Parliament on February 1, outlining a strategic shift toward enhancing the domestic shipbuilding industry.
The proposed Ship Building Financial Assistance Policy 2.0 will mandate a minimum local content requirement of 40% for shipyards to qualify for assistance. This move aims to stimulate investments in local manufacturing of shipbuilding components and raw materials, fostering self-reliance and reducing dependency on imports. Under the revamped policy, financial assistance will be tiered based on the type of vessel, offering incentives for green ships and specialized vessels.
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In a bid to support fleet owners and promote long-term financing options, the Ministry of Ports, Shipping, and Waterways secured infrastructure status for ships based on tonnage and length criteria. Vessels measuring 24 meters and above or exceeding 500 gross tonnage will now be eligible for infrastructure status, enabling access to low-cost funding. This development addresses longstanding challenges faced by the local shipping industry in securing affordable, sustainable financing solutions.
India’s shipbuilding industry is undergoing a significant policy overhaul to enhance competitiveness and bolster local manufacturing capabilities. The revamped Ship Building Financial Assistance Policy underscores the government’s commitment to promoting self-reliance and indigenous production in the maritime sector. By linking financial assistance to local content requirements and granting infrastructure status to large ships, India aims to strengthen its position in the global shipbuilding market and drive economic growth.
The Ship Building Financial Assistance Policy revamp signifies a pivotal shift in India’s approach to supporting the shipbuilding industry. By prioritizing local content and incentivizing green and specialized vessels, the policy update is poised to drive innovation and investment in domestic ship construction. The inclusion of tonnage and length-based criteria for infrastructure status reflects a strategic move to facilitate long-term financing for fleet owners, setting the stage for sustainable growth in the maritime sector.
