Over the past four years, domestic shipyards have received orders totalling Rs 68 billion for 88 vessels, thanks to the Shipbuilding Financial Assistance Policy (SBFAP). Responding to queries in the Rajya Sabha, Sarbananda Sonowal, the Minister for Ports, Shipping and Waterways, revealed that India?s 31 shipyards have successfully delivered 69 vessels valued at Rs 11.45 billion to both domestic and international ship owners during this period, receiving financial assistance amounting to Rs 1.93 billion.

The Shipbuilding Financial Assistance Policy (SBFAP) is a scheme that provides financial support to Indian shipyards for shipbuilding contracts signed between April 1, 2016, and March 31, 2026. The rate of financial assistance started at 20% in 2016 and will gradually diminish to 11% by 2026.

The primary objective of introducing this scheme was to enhance the competitiveness of India-made ships compared to those manufactured in other countries. In May of this year, amendments were made to the guidelines of the scheme, expanding its scope to include wind farm installation vessels and the construction of sophisticated dredgers as specialised vessels eligible for higher financial assistance.

These amendments also introduced a provision for 30% financial assistance for vessels powered by green fuels such as Methanol, Ammonia, or Hydrogen fuel cells. Additionally, a separate set of changes allowed for a 20% financial assistance for vessels equipped with electric propulsion or hybrid propulsion systems.

Prior to these modifications, the scheme was already providing support for Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas carrying vessels, as well as Chemical Tankers, floating or submersible drilling or production platforms, all of which were receiving subsidies.