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Mumbai: In a major policy move aimed at revitalising the country’s maritime capabilities, the Union Cabinet has approved a ₹69,725 crore package to strengthen India’s shipbuilding and maritime infrastructure. The decision marks one of the most substantial investments in the sector to date and reflects a strategic shift toward enhancing domestic capacity, long-term financing, and technical expertise.
The package is built around a four-pillar framework that includes extending financial assistance for shipbuilding, establishing dedicated maritime funds, expanding shipyard infrastructure, and implementing legal and policy reforms. At the heart of the initiative is the extension of the Shipbuilding Financial Assistance Scheme (SBFAS) until 31 March 2036, with a corpus of ₹24,736 crore. The scheme is designed to incentivise domestic shipbuilding and includes a ₹4,001 crore allocation for Shipbreaking Credit Notes, aimed at supporting environmentally responsible dismantling of vessels.
A National Shipbuilding Mission will be set up to oversee the implementation of these measures, ensuring coordination across ministries and stakeholders. The Cabinet also approved the creation of a Maritime Development Fund (MDF) with a total corpus of ₹25,000 crore. This includes a ₹20,000 crore Maritime Investment Fund, in which the government will hold a 49 per cent stake, and a ₹5,000 crore Interest Incentivisation Fund to reduce the cost of debt and improve the viability of maritime projects.
The Shipbuilding Development Scheme (SbDS), with an outlay of ₹19,989 crore, is expected to expand India’s shipbuilding capacity to 4.5 million Gross Tonnage annually. It will support the development of mega shipbuilding clusters, infrastructure upgrades, and the establishment of the India Ship Technology Centre under the Indian Maritime University. The scheme also includes provisions for insurance and risk coverage to support shipbuilding ventures.
Taken together, the measures are projected to generate nearly 30 lakh jobs and attract investments of approximately ₹4.5 lakh crore into the maritime sector. The government expects the initiative to enhance national, energy, and food security by strengthening supply chain resilience and maritime logistics. It also aims to bolster India’s strategic autonomy in the Indo-Pacific region, where maritime infrastructure plays a critical role in geopolitical stability.
India’s maritime sector currently handles about 95 per cent of the country’s trade by volume and 70 per cent by value. Despite this centrality, domestic shipbuilding has struggled to compete globally due to limited financing options, outdated infrastructure, and policy bottlenecks. The new package seeks to address these structural challenges by offering targeted financial support and institutional reforms.
The emphasis on long-term financing through the MDF and the Maritime Investment Fund is particularly significant. Historically, the lack of affordable credit has been a major impediment to shipyard expansion and fleet modernisation. By reducing the effective cost of debt, the government hopes to make Indian shipbuilding projects more bankable and attractive to private investors.
The establishment of the India Ship Technology Centre is another key element of the package. It is expected to serve as a hub for research, innovation, and skill development, helping to build a technically proficient workforce and promote indigenous design capabilities. This aligns with broader efforts to reduce reliance on foreign technology and improve the competitiveness of Indian shipyards.
The Cabinet’s decision comes at a time when global shipping is undergoing rapid transformation, driven by digitalisation, decarbonisation, and shifting trade routes. India’s ability to adapt to these changes and position itself as a reliable shipbuilding hub will be critical to the long-term viability of the sector.
(Write to us at editorial@bombaychamber.com)
