Shipbuilding, maritime funds likely soon

The government is likely to soon roll out an enhanced shipbuilding financial assistance policy worth ₹18,090 crore and a maritime development fund (MDF) of ₹25,000 crore.

Officials privy to the deliberations said the finance ministry's Expenditure Finance Committee (EFC) has completed appraisals for the two initiatives.

"This fund is expected to aid financing for ship acquisition aiming to boost Indian-flagged ships' share in the global cargo volume up to 20% by 2047," a senior official told ET. "By 2030, MDF will aim to generate up to ₹1.5 lakh-crore investments in the shipping sector."

The Centre-through greater financial assistance to the shipbuilding industry-will seek to support manufacture of large vessels in the country. This will be supplemented by MDF to back upgradation of ports.

MDF, announced in Budget 2025-26, will aim to support India's maritime sector financing through equity or debt securities. The Centre will foot 49% of the total funding with the rest contributed by major port authorities and other government arms.

According to Vivek Merchant, director, Swan Defence and Heavy Industries, the domestic industry is expecting greater incentives for green shipbuilding and hybrid technologies from the revamped policy.

"Private Indian shipyards should also get benefits for vessels supplied to Indian defence forces or exports to friendly foreign nations," Merchant said.

Besides MDF, a final approval to give more financial support to domestic shipbuilding is also expected soon.

"Incentives for manufacturing large ships, such as those for intercontinental container movement, will be approved," the official said, adding that the plan is in the final stages.

An existing financial assistance policy for domestic shipyards was launched in December 2015, for shipbuilding contracts signed between April 1, 2016, and March 31, 2026. It is focused on supporting development of specialised vessels such as those for wind farm installations and those powered by green fuels.

"We will go well beyond the existing scheme to better prepare Indian shipbuilding for global trade," the official said.

In addition to these two initiatives, the Shipbreaking Credit note scheme is also expected soon. It will incentivise ship scrapping by issuing a credit note of 40% of the scrap value which can be reimbursed to buy new locally-manufactured ships.