Cabinet approves Rs 69,725-crore plan for shipbuilding, maritime development

Cabinet okays Rs 69,725-crore plan for shipbuilding, maritime development

The Union Cabinet, led by PM Narendra Modi, on September 24 okayed Rs 69,725-crore plan to revitalise India's shipbuilding and maritime sector, said I&B Minister Ashwini Vaishnaw.

"The package introduces a four-pillar approach designed to strengthen domestic capacity, improve long-term financing, promote greenfield and brownfield shipyard development, enhance technical capabilities and skilling, and implement legal, taxation, and policy reforms to create a robust maritime infrastructure," said government in a statement.

Under this package, the Shipbuilding Financial Assistance Scheme (SBFAS) will be extended until 31 March 2036 with a total corpus of Rs 24,736 crore. The scheme aims to incentivise ship building in India and includes a Shipbreaking Credit Note with an allocation of Rs 4,001 crore. A National Shipbuilding Mission will also be established to oversee the implementation of all initiatives.

In addition, the Maritime Development Fund (MDF) has been approved with a corpus of Rs 25,000 crore to provide long-term financing for the sector. This includes a Maritime Investment Fund of Rs 20,000 crore with 49% participation from the Government of India and an Interest Incentivization Fund of Rs 5,000 crore to reduce the effective cost of debt and improve project bankability. Furthermore, the Shipbuilding Development Scheme (SbDS), with a budgetary outlay of Rs.19,989 crore, aims to expand domestic shipbuilding capacity to 4.5 million Gross Tonnage annually, support mega shipbuilding clusters, infrastructure expansion, establish the India Ship Technology Centre under the Indian Maritime University, and provide risk coverage, including insurance support for shipbuilding projects.

The overall package is expected to unlock 4.5 million Gross Tonnage of shipbuilding capacity, generate nearly 30 lakh jobs, and attract investments of approximately Rs 4.5 lakh crore into India’s maritime sector, said government.