Govt announces that financial assistance scheme to enable faster growth of a homegrown shipping industry will be launched in Budget 2025

The Indian government announced that the Shipbuilding Financial Assistance Policy will be restarted in the Union Budget for 2025-26.

"Shipbuilding financial assistance scheme to be restarted, as a thrusts to the shipbuilding industry in India. Ship building clusters will be facilitated in India," the finance minister said in her Budget speech on February 1.

The finance minister also announced that a maritime development fund with corpus of Rs 25,000 crore would be set up. The Central government will give the shipbuilding industry a thrust, as shipbuilding clusters will be facilitated.

The fund will have up to 49 percent contribution by the government, and the balance will be mobilized from ports and private sector.

She added that the Shipbuilding Financial Assistance Policy will be revamped to address cost disadvantages, which will also include Credit Notes for shipbreaking in Indian yards to promote the circular economy. Further, the large ships above a specified size are also proposed to be included in the infrastructure harmonized master list (HML).

The Union Budget also proposes to facilitate ‘Shipbuilding Clusters’ in order to increase the range, categories and capacity of ships. This will include additional infrastructure facilities, skilling and technology to develop the entire ecosystem.

Sitharaman also said that the government plans to continue exemption on Basic Customs Duty on raw materials, components, consumables or parts for the manufacture of ships for another ten years. She further proposed the same dispensation for ship breaking to make it more competitive.

The shipping industry has long sought that the ministry of ports, shipping and waterways' (MoPSW) capital subsidy scheme – Shipbuilding Financial Assistance Policy (SBFAP) – be extended for shipbuilding by another 10 years under Amritkaal Maritime Vision 2047.

The scheme, which ends in March 2026. provides financial assistance to Indian shipyards for shipbuilding contracts signed between 1 April, 2016, and 31 March, 2026 with the rate of financial assistance starting from 20% in 2016 and diminishing to 11% in 2026.