India Unveils Comprehensive Shipbuilding Financial Assistance Scheme
MUMBAI: The Ministry of Ports, Shipping and Waterways has announced new guidelines for a 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 top ten nations in ship ownership and shipbuilding by 2030, with aspirations to reach the top five by 2047. The guidelines were finalized on December 26, following extensive consultations with industry stakeholders.
The Shipbuilding Financial Assistance Scheme (SBFAS) will apply to contracts signed between September 24, 2025, and March 31, 2036. The initiative is designed to promote the construction of large, green, and specialized vessels. The budget allocates ₹20,416 crore specifically for this purpose. Financial assistance will vary based on the size and type of vessel. For smaller vessels costing up to ₹100 crore, assistance is capped at 15% of the actual value. For larger vessels exceeding ₹100 crore, the aid 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 balance.
The financial aid will be disbursed in three stages: 30% during keel laying, 40% upon launching, and the final 30% upon delivery, with security measures in place at each stage. Additionally, vessels ordered by government entities or public sector undertakings will have their fair price determined through an open tender or valuation process.
Eligibility and Additional Benefits for Shipbuilders
To qualify for financial assistance, vessels must be constructed and delivered within specific timelines. For contracts involving one or two vessels, delivery must occur within four years. Contracts for three or four vessels must be completed within six years. If five or more vessels are involved, each subsequent ship must be delivered within one year of the previous vessel’s delivery.
In cases of unforeseen circumstances, such as natural disasters or pandemics, the delivery schedule may be extended. Shipyards can also claim benefits from other government schemes in addition to the assistance provided under SBFAS. However, if vessels are not delivered within the stipulated timelines, shipyards will be required to reimburse the financial assistance received, with interest.
At Mundra port, DRI confiscates 200 containers valued at ₹100 crore
Moreover, vessels scrapped at Indian ship recycling yards compliant with the Hong Kong Convention will be eligible for a ‘Shipbreaking Credit Note’ worth 40% of their fair scrap value. This note can be redeemed against new ship orders at Indian shipyards, subject to certain limits.
The scheme also includes a credit risk coverage component to protect shipyards from financial losses due to buyer defaults or vendor failures. The government will provide capital assistance for expanding brownfield shipyards, capped at ₹1,500 crore per yard, while plans for developing greenfield shipbuilding clusters are underway. Each cluster will feature extensive infrastructure and aim to enhance India’s shipbuilding capacity significantly.
In summary, the newly introduced shipbuilding financial assistance scheme marks a significant step towards bolstering India’s maritime industry, aiming to enhance ship ownership and production capabilities in the coming years.
