The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a comprehensive package worth Rs.69,725 crore to boost shipbuilding, maritime financing, and domestic capacity in India. The initiative is aimed at revitalising the country’s maritime sector through a four-pillar strategy that covers financing, infrastructure, technical development, and policy reforms.
The package extends the Shipbuilding Financial Assistance Scheme (SBFAS) till March 31, 2036, with a total corpus of Rs.24,736 crore. It also introduces a Shipbreaking Credit Note worth Rs.4,001 crore to support sustainable practices in the sector. A National Shipbuilding Mission will be set up to oversee implementation.
A Maritime Development Fund (MDF) with a corpus of Rs.25,000 crore has also been cleared, which will include a Maritime Investment Fund of Rs.20,000 crore with 49 per cent government participation, along with an Interest Incentivization Fund of Rs.5,000 crore to lower borrowing costs.
In addition, the Shipbuilding Development Scheme (SbDS), with an outlay of Rs.19,989 crore, has been approved to expand India’s domestic shipbuilding capacity to 4.5 million Gross Tonnage annually. The scheme will promote mega shipbuilding clusters, expand infrastructure, and support the establishment of the India Ship Technology Centre under the Indian Maritime University. It will also provide risk coverage, including insurance support for shipbuilding projects.
The overall package is expected to unlock investments worth Rs.4.5 lakh crore, create nearly 30 lakh jobs, and establish 4.5 million Gross Tonnage of additional capacity.
India’s maritime sector, with a history of centuries of trade and seafaring, continues to be a backbone of the economy, handling nearly 95 per cent of trade by volume and 70 per cent by value. Shipbuilding, often called the “mother of heavy engineering,” contributes to employment, investment, national security, and strengthens the resilience of trade and energy supply chains.
