Cabinet Approves ₹69,725 Cr Package to Transform India’s Shipbuilding Sector

This decision marks a historic intervention to strengthen domestic capacity, modernize infrastructure, and make India a competitive force in the global shipping industry.

Recognizing the strategic and economic importance of India’s maritime industry, the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved a comprehensive package worth ₹69,725 crore aimed at revitalizing the country’s shipbuilding and maritime ecosystem. This decision marks a historic intervention to strengthen domestic capacity, modernize infrastructure, and make India a competitive force in the global shipping industry.

Four-Pillar Approach for Maritime Transformation

The approved package is designed around a four-pillar approach that covers:

1. Strengthening Domestic Capacity – expanding shipbuilding capacity and supporting clusters.

2. Financing and Investment Support – establishing long-term funding mechanisms to reduce debt costs and attract capital.

3. Technology and Skill Development – setting up advanced centers and programs to upgrade technical expertise and manpower.

4. Legal, Taxation, and Policy Reforms – implementing structural changes to create a competitive ecosystem.

Together, these measures aim to position shipbuilding as the “mother of heavy engineering” in India, fostering industrial growth, strategic independence, and sustainable employment.

Key Initiatives Under the Package

1. Shipbuilding Financial Assistance Scheme (SBFAS)

• Extended until 31 March 2036 with a corpus of ₹24,736 crore.

• Will incentivize shipbuilding in India, offering financial support to domestic shipyards.

• Includes a new Shipbreaking Credit Note scheme with an allocation of ₹4,001 crore to encourage recycling and sustainability.

• A dedicated National Shipbuilding Mission will oversee implementation, ensuring coordination and policy alignment.

2. Maritime Development Fund (MDF)

• Approved with a corpus of ₹25,000 crore to provide long-term financing.

• Comprises:

  • Maritime Investment Fund of ₹20,000 crore (49% government participation).

  • Interest Incentivization Fund of ₹5,000 crore to reduce debt servicing costs and improve project bankability.

• Expected to unlock large-scale private sector investment into shipbuilding, ports, and allied industries.

3. Shipbuilding Development Scheme (SbDS)

• With a budgetary outlay of ₹19,989 crore, this scheme focuses on:

  • Expanding domestic shipbuilding capacity to 4.5 million Gross Tonnage (GT) annually.

  • Supporting mega shipbuilding clusters and industrial infrastructure expansion.

  • Establishing the India Ship Technology Centre under the Indian Maritime University for advanced R&D.

  • Providing risk coverage and insurance support for shipbuilding projects to de-risk investment.

Economic and Employment Impact

The package is projected to unlock 4.5 million GT of shipbuilding capacity, generate nearly 30 lakh jobs, and attract investments worth approximately ₹4.5 lakh crore into the maritime sector.

This multiplier effect will not only strengthen India’s economy but also create opportunities in associated sectors such as steel, engineering, logistics, design, and renewable energy.

Strategic and Security Benefits

Beyond economic growth, the initiative is expected to:

• Reinforce national security by building self-reliance in ship production.

• Enhance energy and food security through resilient supply chains and maritime logistics.

• Support strategic autonomy by reducing dependence on foreign shipbuilders.

• Strengthen India’s position as a geopolitical maritime power in the Indo-Pacific and beyond.

A Maritime Legacy Revived

India has an illustrious maritime history, with centuries of trade, shipbuilding, and seafaring that connected the subcontinent to global commerce. Today, the maritime sector remains the backbone of India’s economy, handling nearly 95% of trade by volume and 70% by value.

By focusing on modern shipbuilding, India is not only reviving its maritime legacy but also building resilience for the future.

 

The approval of the ₹69,725 crore shipbuilding and maritime package is a game-changing reform that aligns with the vision of Aatmanirbhar Bharat. It will boost domestic shipyards, attract global investment, create millions of jobs, and transform India into a maritime powerhouse of the 21st century.