Shipping poised for major Atmanirbhar push as Cabinet may weigh three schemes worth Rs 70,000 crore

MoS for Ports and Shipping, Shantanu Thakur had recently said that the Centre is planning to develop more shipyards and is looking to target 5 percent share of global shipbuilding market by 2030.

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The Union Cabinet is expected to take up three shipping sector schemes worth Rs 70,000 crore, CNBC Awaaz reported on September 24 citing people familiar with the development requesting anonymity.

Select shares from the shipping sector, namely SCI, GRSE and Mazagon Dock are sharply higher in anticipation of further push by the government which has been increasingly looking to boost shipping and shipbuilding activities in India, both for domestic market as well as for exports.

Among the schemes that have been in the news recently are a shipbuilding fund worth Rs 20,000 crore, a Rs 25,000 crore Maritime Development Fund which was announced during the Union Budget, and a shipbuilding financial assistance scheme of Rs 25,000 crore. The MDF is expected to have government's contribution at 49 percent while the rest will be from port authorities, PSUs, financial institutions as well as the private sector.

These schemes are aimed to providing incentives, interest subsidies, and long-term finance to boost domestic shipbuilding, ship-breaking and port-linked infrastructure. The government has also been pushing for the development of greenfield clusters and expansion of existing shipping hubs. As part of this, Cochin Shipyard (CSL) on September 23 signed an agreement with HD Korea Shipbuilding & Offshore Engineering (HD KSOE) for a collaboration in shipbuilding. CSL is also considering developing a Rs 15,000 crore shipyard in Tamil Nadu that will result the creation of 10,000 jobs.

MoS for Ports and Shipping, Shantanu Thakur had recently said that the Centre is planning to develop more shipyards and is looking to target 5 percent share of global shipbuilding market by 2030. "We are targeting a 5 percent share in the global shipbuilding market by 2030, a significant leap from our current position. This will be achieved through strategic investments in automation, digital twin technology and green shipbuilding innovations," MoS for Ports and Shipping had said on September 15 during a CII conference. The government plans to develop "10 world-class shipyards by 2030, supported by public-private partnerships and international collaborations that will bring global best practices to Indian shores."

Bloomberg News too had reported citing people familiar with the development that the Centre also has plans to rollout incentives worth Rs 4,000 crore to support India's shipbreaking industry.

Finance Minister Nirmala Sitharaman had proposed to set up a Maritime Development Fund (MDF) for financial assistance, via equity or debt securities. With an initial corpus of Rs 25,000 crore, MDF will have government's contribution at 49 percent while the rest will be from port authorities, PSUs, financial institutions as well as the private sector.

The government recently accorded infrastructure status to “large ships", on September 19, after Finance Minister Nirmala Sitharaman announced the proposal during the Budget speech. “‘Large ships’ are included in the harmonised master list of infrastructure sub-sectors by insertion of a new item in the category of ‘Transport and Logistics’,” the finance ministry’s gazette notification said.