Cabinet Clears Rs 69,725 Cr boost for Shipbuilding

26 Sep 2025 CW Team

Key measures include extension of the Shipbuilding Financial Assistance Scheme (SBFAS) to 31 March 2036 with a corpus of Rs 24,736 crore, complemented by a Shipbreaking Credit Note window of Rs 4,001 crore to spur responsible recycling. A National Shipbuilding Mission will steer implementation and performance tracking.

To address financing gaps that have historically constrained the sector, a Maritime Development Fund of Rs 25,000 crore has been approved. This features a Rs 20,000 crore Maritime Investment Fund with 49% Government participation to crowd-in private capital, and a Rs 5,000 crore Interest Incentivisation Fund to reduce the effective cost of debt and improve project bankability.

Further, the Shipbuilding Development Scheme (SbDS) with an outlay of Rs 19,989 crore seeks to expand domestic capacity to 4.5 million GT annually, support greenfield and brownfield yard clusters, catalyse infrastructure modernisation, establish the India Ship Technology Centre under the Indian Maritime University, and provide risk coverage including insurance support for complex builds.

The package is expected to unlock 4.5 million GT of capacity, generate nearly 30 lakh jobs and mobilise investments of about Rs 4.5 lakh crore. Beyond economics, it strengthens energy and food security by hardening maritime supply chains and boosts India’s geopolitical resilience—advancing Aatmanirbhar Bharat while positioning the country as a competitive builder in global shipping. Shipbuilding—often called the “mother of heavy engineering”—supports high-skill employment, deepens manufacturing ecosystems and underpins the 95% of India’s trade by volume and 70% by value that moves by sea.

Recognising the strategic heft of maritime industries to trade, logistics resilience and national security, the Union Cabinet has recently approved a Rs 69,725 crore package to revitalise India’s shipbuilding and wider maritime ecosystem. The four-pillar programme spans capacity expansion, long-term financing, technology and skills upgrading, and reforms across legal, taxation and policy frameworks.Key measures include extension of the Shipbuilding Financial Assistance Scheme (SBFAS) to 31 March 2036 with a corpus of Rs 24,736 crore, complemented by a Shipbreaking Credit Note window of Rs 4,001 crore to spur responsible recycling. A National Shipbuilding Mission will steer implementation and performance tracking.To address financing gaps that have historically constrained the sector, a Maritime Development Fund of Rs 25,000 crore has been approved. This features a Rs 20,000 crore Maritime Investment Fund with 49% Government participation to crowd-in private capital, and a Rs 5,000 crore Interest Incentivisation Fund to reduce the effective cost of debt and improve project bankability.Further, the Shipbuilding Development Scheme (SbDS) with an outlay of Rs 19,989 crore seeks to expand domestic capacity to 4.5 million GT annually, support greenfield and brownfield yard clusters, catalyse infrastructure modernisation, establish the India Ship Technology Centre under the Indian Maritime University, and provide risk coverage including insurance support for complex builds.The package is expected to unlock 4.5 million GT of capacity, generate nearly 30 lakh jobs and mobilise investments of about Rs 4.5 lakh crore. Beyond economics, it strengthens energy and food security by hardening maritime supply chains and boosts India’s geopolitical resilience—advancing Aatmanirbhar Bharat while positioning the country as a competitive builder in global shipping. Shipbuilding—often called the “mother of heavy engineering”—supports high-skill employment, deepens manufacturing ecosystems and underpins the 95% of India’s trade by volume and 70% by value that moves by sea.

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