- India is implementing incentives and policies to strengthen domestic shipbuilding.
- A National Shipbuilding Mission and Maritime Development Fund are key components.
- The goal is to reduce reliance on foreign vessels and increase India’s share in global shipping.
India’s government is planning to fund and develop shipbuilding infrastructure to enhance its presence in global sea-borne trade. The initiative aims to mimic successful shipbuilding models from countries like South Korea and Japan to reduce dependency on foreign vessels, reports Hellenic Shipping News.
Policy Discussions for Domestic Shipbuilding Support
The Union Shipping Ministry is discussing a policy offering Viability Gap Funding (VGF) to make domestic projects feasible.
There will also be a purchase preference policy from FY31, mandating that vessels registered for coastal cargo transport be built in India.
National Shipbuilding Mission in the Works
The National Shipbuilding Mission will lead efforts to implement the Shipbuilding Financial Assistance Programme (SBFAP) 2.0. The budget of ₹18,000 crore was allocated through FY34.
This initiative aims to increase India’s fleet and enhance self-reliance in line with Atmanirbhar Bharat’s goals.
Boosting India’s Maritime Capacity
India aims to expand its capacity in both coastal and global shipping routes.
With only a 1% share in global shipbuilding, the government’s mission seeks to raise this to 5% by 2047, helping the nation become more competitive globally.
Increasing Share of Indian-Made Ships
The policy, set for finalization after inter-ministerial consultations, will gradually increase Indian-made and Indian-flagged ships in cargo operations.
The aim is to grow Indian-built ships in the national fleet from the current 5% to 7% by 2030 and 69% by 2047.
New Credit System for Shipbreaking
A new credit system will allow entities offering vessels for shipbreaking to get a credit note worth 40% of fair scrap value. It can be used toward building new vessels at Indian shipyards.
This initiative aligns with the government’s broader strategy to support domestic shipbuilding.
Maritime Development Fund
The plan is offering a Maritime Development Fund (MDF) with ₹25,000 crore for a long-term, low-cost support for the shipbuilding sector.
This fund will back infrastructure projects, including shipyards, repair yards, ports, and dredging operations, to meet India’s growing maritime needs.
Government and Private Sector Collaboration
The Indian government will hold a 26% minority stake in the MDF, while majority stakes will be available to global financial institutions.
This public-private collaboration will drive investments in debt, equity, VGF, and buyer credit for blue economy projects.
Addressing Financial Challenges in Maritime
EY India’s Mihir Shah highlights that the MDF aims to address financing challenges by providing stable, long-term capital for the sector.
This includes support for decarbonization, EXIM logistics, and fleet expansion.
Enhancing Self-Reliance in Shipping
Pushpank Kaushik of Jassper Shipping sees the policy as crucial for achieving 5% global tonnage share.
He notes that, along with promoting local ship owners, India could become a shipbuilding hub to rival Vietnam, Korea, Japan, and China.
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Source: Hellenic Shipping News
