New Delhi: The Union Cabinet on Wednesday approved a Rs 69,725 crore package to revitalise India’s shipbuilding and reduce dependence on foreign ships as part of the government's plan to regain the country's maritime power.
According to an official statement, the package introduces a four-pillar approach designed to strengthen domestic capacity, improve long-term financing, promote greenfield and brownfield shipyard development, enhance technical capabilities and skilling, and implement legal, taxation, and policy reforms to create a robust maritime infrastructure.
Under the package, the Shipbuilding Financial Assistance Scheme (SBFAS) will be extended until March 31, 2036, with a total corpus of Rs 24,736 crore.
"The scheme aims to incentivise shipbuilding in India and includes a Shipbreaking Credit Note with an allocation of Rs 4,001 crore. A National Shipbuilding Mission will also be established to oversee the implementation of all initiatives," the statement said.
In addition, the Maritime Development Fund (MDF) has been approved with a corpus of Rs 25,000 crore to provide long-term financing for the sector.
"This includes a Maritime Investment Fund of Rs 20,000 crore with 49 per cent participation from the government of India and an Interest Incentivisation Fund of Rs 5,000 crore to reduce the effective cost of debt and improve project bankability," the statement said.
Furthermore, the statement said the Shipbuilding Development Scheme (SbDS), with a budgetary outlay of Rs 19,989 crore, aims to expand domestic shipbuilding capacity to 4.5 million gross tonnage annually, support mega shipbuilding clusters, infrastructure expansion, establish the India Ship Technology Centre under the Indian Maritime University, and provide risk coverage, including insurance support for shipbuilding projects.
Last week, Prime Minister Narendra Modi made a strong pitch for 'atmanirbharta' in the Shipping sector, saying India pays a staggering USD 75 billion or approximately Rs 6 lakh crore every year to foreign shipping companies for their services.
"Till 50 years ago, our trade was carried out by 40 per cent ships made in India, but this has now come down to just 5 per cent," the Prime Minister had pointed out.
India holds 0.06 per cent of the total global shipbuilding market and is ranked 20th in the industry, but aims to break into the top ten ranking by 2030 and top 5 by 2047.
Data also show that the share of export-import (EXIM) cargo carried on Indian ships reduced sharply from 71 per cent in 1987-88 to just 5 per cent in 2022-23.
According to the statement, the overall package is expected to unlock 4.5 million gross tonnage of shipbuilding capacity, generate nearly 30 lakh jobs, and attract investments of approximately Rs 4.5 lakh crore into India’s maritime sector.
Beyond its economic impact, the initiative will strengthen national, energy, and food security by bringing resilience to critical supply chains and maritime routes, it added.
The statement also noted that it will reinforce India's geopolitical resilience and strategic self-reliance, advancing the vision of Aatmanirbhar Bharat and positioning India as a competitive force in global shipping and shipbuilding.
In a bid to promote Make in India, the government has included large ships in the harmonised master list of infrastructure.
Commercial vessels having a gross tonnage of 10,000 or more, under Indian ownership and flag, will be qualified to get infrastructure status.
Besides, the commercial vessels having a gross tonnage of 1,500 or more, which are built in India and are under Indian ownership and flag, will get the status.
India has a long and illustrious maritime history, with centuries of trade and seafaring that connected the subcontinent to the world.
Today, the statement said, the maritime sector remains a backbone of the Indian economy, supporting nearly 95 per cent of the nation’s trade by volume and 70 per cent by value.
At its core lies shipbuilding, often described as the "mother of heavy engineering", which not only contributes significantly to employment and investment but also enhances national security, strategic independence, and the resilience of trade and energy supply chains.
"A landmark day for India's Aatmanirbhar maritime ambitions! In a historic move, the Cabinet chaired by Hon'ble PM Shri @narendramodi Ji approves a transformative Rs 69,725 crore package to revitalize our shipbuilding & maritime sector. This is a giant leap towards Aatmanirbhar Shipping & our aim of becoming a Top 5 shipbuilding nation by 2047," Union Ports, Shipping and Waterways Minister Sarbananda Sonowal said in a post on X.