Centre rolls out ₹44,700-crore push to scale up India’s shipbuilding industry

The Centre has notified detailed operational guidelines for two major shipbuilding initiatives involving a combined outlay of ₹44,700 crore, marking a significant step toward strengthening India’s domestic shipbuilding ecosystem and enhancing its global competitiveness.

The first initiative, the Shipbuilding Financial Assistance Scheme (SBFAS), carries a total allocation of ₹24,736 crore and is aimed at supporting shipyards through direct financial incentives. Under the scheme, the government will provide assistance ranging from 15 percent to 25 percent of the contract value per vessel, depending on the type and size of the ship. The scheme introduces a graded incentive structure covering small and large conventional vessels as well as specialized ships.

Financial assistance under SBFAS will be disbursed in stages, linked to clearly defined construction milestones and secured through appropriate financial instruments. The guidelines also provide incentives for series production orders, encouraging scale and efficiency in domestic shipbuilding. Over the next ten years, the scheme is expected to catalyse shipbuilding projects worth around ₹96,000 crore, boost indigenous manufacturing and generate substantial employment across the maritime supply chain.

The second initiative, the Shipbuilding Development Scheme (SbDS), has a budgetary outlay of ₹19,989 crore and focuses on long-term capacity and capability creation. The scheme supports the development of new greenfield shipbuilding clusters, the expansion and modernisation of existing brownfield shipyards, and the establishment of an India Ship Technology Centre under the Indian Maritime University to drive research, design, innovation and skill development.

The approved guidelines establish a transparent and accountable framework for implementation. Under SbDS, greenfield shipbuilding clusters will receive full capital support for common maritime and internal infrastructure through a special purpose vehicle jointly funded by the Centre and states on a 50:50 basis. Existing shipyards will be eligible for up to 25 per cent capital assistance for brownfield expansion of critical facilities, including dry docks, shiplifts, fabrication units and automation systems. All disbursements will be milestone-based and subject to monitoring by independent evaluation agencies.

The scheme also introduces a Credit Risk Coverage Framework, offering government-backed insurance against pre-shipment, post-shipment and vendor-default risks, aimed at improving project bankability and strengthening financial resilience.

Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal said the initiatives reflect a decisive policy reset for India’s shipbuilding sector under the leadership of Prime Minister Narendra Modi. According to the ministry, the creation of modern infrastructure and a skilled workforce under these schemes is expected to raise India’s commercial shipbuilding capacity to around 4.5 million gross tonnage per annum by 2047.

Both SBFAS and SbDS will remain in force until March 31, 2036, with an in-principle extension envisaged up to 2047, aligning the initiatives with India’s long-term maritime development goals.