Govt clears framework for two shipbuilding schemes with Rs 44,700 crore outlay

The Ministry of Ports, Shipping and Waterways (MoPSW) has notified guidelines for two major shipbuilding initiatives with a combined outlay of over Rs 44,700 crore, according to an official statement.

The initiatives — the Shipbuilding Financial Assistance Scheme (SBFAS) and the Shipbuilding Development Scheme (SbDS) — aim to strengthen India’s domestic shipbuilding capacity and improve global competitiveness.

Under the SBFAS, which has a total corpus of Rs 24,736 crore, the government will provide financial assistance ranging from 15 per cent to 25 per cent per vessel, depending on the category of the vessel.

The SbDS has a budgetary outlay of Rs 19,989 crore and focuses on long-term capacity and capability creation in the shipbuilding sector.

Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal said the guidelines create a stable and transparent framework that will revive domestic shipbuilding and boost forward and backward linkages, the statement said.

The scheme introduces graded support for small normal, large normal and specialised vessels, with stage-wise disbursement linked to defined milestones and backed by security instruments. Incentives for series orders have also been included, the statement added.

The guidelines provide for the establishment of a National Shipbuilding Mission to ensure coordinated planning and execution of shipbuilding initiatives.

They also introduce a shipbreaking credit note, under which ship owners scrapping vessels at Indian yards will receive a credit equivalent to 40 per cent of the scrap value. This links ship recycling with new ship construction and supports a circular economy approach.

According to the statement, independent valuation and milestone-based assessments have been made mandatory to strengthen governance and ensure efficient use of public funds.

Over the next decade, SBFAS is expected to support shipbuilding projects worth about ₹96,000 crore, stimulate domestic manufacturing and generate employment across the maritime value chain, the statement said.

The scheme also provides for the development of greenfield shipbuilding clusters, expansion and modernisation of existing brownfield shipyards, and the establishment of an India Ship Technology Centre under the Indian Maritime University to support research, design, innovation and skills development.

Under SbDS, greenfield shipbuilding clusters will receive 100 per cent capital support for common maritime and internal infrastructure through a 50:50 Centre-state special purpose vehicle. Existing shipyards will be eligible for 25 per cent capital assistance for brownfield expansion of critical infrastructure, including dry docks, shiplifts, fabrication facilities and automation systems.

With the creation of modern infrastructure and a skilled workforce, commercial shipbuilding capacity is projected to rise to about 4.5 million gross tonnage per annum by 2047, as per the statement.

“Both SBFAS and SbDS will remain valid until March 31, 2036, with an in-principle extension envisaged up to 2047,” the statement said, adding that the schemes are expected to generate employment, promote indigenous technology development and strengthen India’s maritime security and economic resilience.