Cabinet Approves Massive Investment to Boost Shipbuilding and Maritime Sector
NEW DELHI – In a significant move to strengthen India’s maritime industry and advance the vision of Aatmanirbhar Bharat, the Union Cabinet, led by Prime Minister Narendra Modi, has approved a comprehensive package worth Rs. 69,725 crore. This four-pillar approach aims to transform the nation’s shipbuilding and maritime ecosystem, boosting domestic capacity, enhancing long-term financing, and promoting infrastructure development.
The package is set to revitalize a sector that is crucial for the Indian economy, handling 95% of the nation’s trade by volume. It is expected to create a robust maritime infrastructure, generate millions of jobs, and secure India’s position as a competitive force in global shipping.
A cornerstone of the initiative is the extension of the Shipbuilding Financial Assistance Scheme (SBFAS) until March 31, 2036. With a total corpus of Rs. 24,736 crore, the scheme is designed to incentivize domestic shipbuilding. It also includes a Shipbreaking Credit Note worth Rs. 4,001 crore to promote sustainable ship recycling practices. A new National Shipbuilding Mission will oversee the implementation of these initiatives.
To address the critical need for long-term financing, the government has approved the Maritime Development Fund (MDF) with a corpus of Rs. 25,000 crore. This includes a Maritime Investment Fund of Rs. 20,000 crore, with a 49% government stake, and an Interest Incentivization Fund of Rs. 5,000 crore to lower the cost of debt for projects, improving their financial viability.
Furthermore, the Shipbuilding Development Scheme (SbDS), backed by an outlay of Rs. 19,989 crore, aims to significantly expand India’s domestic shipbuilding capacity to 4.5 million Gross Tonnage annually. This scheme will support the development of mega shipbuilding clusters, facilitate infrastructure expansion, and establish the India Ship Technology Centre under the Indian Maritime University. It will also provide crucial risk coverage, including insurance support for new shipbuilding projects.
This strategic investment is projected to unlock 4.5 million Gross Tonnage of shipbuilding capacity and attract investments of approximately Rs. 4.5 lakh crore into the maritime sector. The initiative is also poised to be a major job creator, with an estimated 30 lakh new jobs expected across the industry.
Beyond its economic benefits, the package is crucial for strengthening national, energy, and food security by building resilience in key supply chains and maritime routes. The government believes this will reinforce India’s geopolitical self-reliance and strategic independence, positioning the country as a major player in global shipping and shipbuilding.
This comprehensive approach marks a new chapter for India’s historic maritime sector, aiming to revive its legacy and prepare it for a dominant role in the 21st-century global economy.
