Strengthening India's Shipbuilding Clusters through Policy Advancements

02 Apr 2025 CW Team

Key Developments in Shipbuilding Infrastructure Revised Shipbuilding Financial Assistance Policy (SBFAP) Amended on 29 January 2025 to encourage greater participation in shipbuilding activities. Includes 30% financial assistance for vessels using green fuels like methanol, ammonia, or hydrogen fuel cells. Offers 20% financial assistance for vessels with fully electric or hybrid propulsion systems.

Standard Tug Designs for Major Ports

In November 2021, the government introduced five standard tug designs for procurement by major ports to ensure uniformity and promote domestic shipbuilding. Right of First Refusal (RoFR) for Indigenous Shipbuilding Revised on 20 September 2023, prioritising Indian-built, Indian-flagged, and Indian-owned vessels in any tender-based charter process. Green Tug Transition Programme (GTTP) Launched to reduce carbon emissions and promote eco-friendly tugboat operations. Harit Nauka Guidelines

Introduced to encourage the use of green technologies in inland waterway vessels.

Shipyards Recognised as Infrastructure Sector Included in the Harmonized Master List of Infrastructure Sub-sectors (Gazette Notification No. 112, dated 13 April 2016), providing shipyards with better access to financing and incentives. Make in India: Procurement Preference for Domestic Shipyards Public sector entities must ensure a minimum local content in procurement, per the Public Procurement (Preference to Make in India) Order, 2017.

Budget 2025 Announcements for Shipbuilding Revamped Shipbuilding Financial Assistance Policy to address cost disadvantages. Inclusion of large ships in the Infrastructure Harmonized Master List (HML). Creation of Shipbuilding Clusters with added infrastructure, skill development, and technology.

10-year extension of Basic Customs Duty (BCD) exemption on raw materials, components, and consumables for ship manufacturing.

Cochin Shipyard Limited’s Global Collaborations Fincantieri, Italy (MoU signed on 27 October 2020) – Collaboration in ship design, construction, repair, and marine equipment manufacturing. IHC Holland BV & Dredging Corporation of India (DCI) (MoU signed on 26 November 2020) – Facilitating the construction of IHC-designed Trailing Suction Hopper Dredgers (TSHDs) in India. Robert Allan Limited, Canada (MoU signed on 26 February 2021) – Providing design and consultancy services for tugs, inland vessels, and specialised crafts. Seatrium LeTourneau (MoU signed on 20 November 2024) – Developing Jack-Up Rig projects in India under the ‘Make in India’ initiative.

These initiatives reaffirm the government’s commitment to strengthening India’s shipbuilding capabilities, reducing reliance on imports, and positioning the country as a global leader in the maritime industry.

The Government of India has undertaken a series of initiatives to upgrade and modernise the shipbuilding sector, fostering indigenous manufacturing, enhancing competitiveness, and promoting sustainability in maritime infrastructure. Key Developments in Shipbuilding Infrastructure Revised Shipbuilding Financial Assistance Policy (SBFAP) Amended on 29 January 2025 to encourage greater participation in shipbuilding activities. Includes 30% financial assistance for vessels using green fuels like methanol, ammonia, or hydrogen fuel cells. Offers 20% financial assistance for vessels with fully electric or hybrid propulsion systems. Standard Tug Designs for Major Ports In November 2021, the government introduced five standard tug designs for procurement by major ports to ensure uniformity and promote domestic shipbuilding. Right of First Refusal (RoFR) for Indigenous Shipbuilding Revised on 20 September 2023, prioritising Indian-built, Indian-flagged, and Indian-owned vessels in any tender-based charter process. Green Tug Transition Programme (GTTP) Launched to reduce carbon emissions and promote eco-friendly tugboat operations. Harit Nauka Guidelines Introduced to encourage the use of green technologies in inland waterway vessels. Shipyards Recognised as Infrastructure Sector Included in the Harmonized Master List of Infrastructure Sub-sectors (Gazette Notification No. 112, dated 13 April 2016), providing shipyards with better access to financing and incentives. Make in India: Procurement Preference for Domestic Shipyards Public sector entities must ensure a minimum local content in procurement, per the Public Procurement (Preference to Make in India) Order, 2017. Budget 2025 Announcements for Shipbuilding Revamped Shipbuilding Financial Assistance Policy to address cost disadvantages. Inclusion of large ships in the Infrastructure Harmonized Master List (HML). Creation of Shipbuilding Clusters with added infrastructure, skill development, and technology. 10-year extension of Basic Customs Duty (BCD) exemption on raw materials, components, and consumables for ship manufacturing. Cochin Shipyard Limited’s Global Collaborations Fincantieri, Italy (MoU signed on 27 October 2020) – Collaboration in ship design, construction, repair, and marine equipment manufacturing. IHC Holland BV & Dredging Corporation of India (DCI) (MoU signed on 26 November 2020) – Facilitating the construction of IHC-designed Trailing Suction Hopper Dredgers (TSHDs) in India. Robert Allan Limited, Canada (MoU signed on 26 February 2021) – Providing design and consultancy services for tugs, inland vessels, and specialised crafts. Seatrium LeTourneau (MoU signed on 20 November 2024) – Developing Jack-Up Rig projects in India under the ‘Make in India’ initiative. These initiatives reaffirm the government’s commitment to strengthening India’s shipbuilding capabilities, reducing reliance on imports, and positioning the country as a global leader in the maritime industry.

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