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

By Admin

29 Dec, 2025

Introduction
In a major boost to India’s maritime ambitions, the Centre has notified detailed operational guidelines for two flagship shipbuilding initiatives with a combined outlay of ₹44,700 crore. The move marks a decisive step toward strengthening the domestic shipbuilding ecosystem, improving global competitiveness, and aligning the sector with India’s long-term maritime development vision up to 2047.

Shipbuilding Financial Assistance Scheme (SBFAS): Direct Support to Shipyards
The first initiative, the Shipbuilding Financial Assistance Scheme (SBFAS), has been allocated ₹24,736 crore to provide direct financial incentives to Indian shipyards. Under this scheme, financial assistance ranging from 15 per cent to 25 per cent of the contract value per vessel will be provided, depending on the type and size of the ship.

The scheme follows a graded incentive structure covering small and large conventional vessels as well as specialised ships. Assistance will be disbursed in stages, linked to clearly defined construction milestones and secured through appropriate financial instruments. To encourage scale and efficiency, the guidelines also provide additional incentives for series production orders. Over the next decade, SBFAS is expected to catalyse shipbuilding projects worth around ₹96,000 crore, boost indigenous manufacturing, and generate significant employment across the maritime supply chain.

Shipbuilding Development Scheme (SbDS): Building Long-Term Capacity
The second initiative, the Shipbuilding Development Scheme (SbDS), carries 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, 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.

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 such as dry docks, shiplifts, fabrication units, and automation systems. All disbursements will be milestone-based and monitored by independent evaluation agencies to ensure transparency and accountability.

Credit Risk Coverage Framework: Strengthening Financial Confidence
A key feature of the new policy framework is the introduction of a Credit Risk Coverage Framework. This offers government-backed insurance against pre-shipment, post-shipment, and vendor-default risks. The objective is to improve project bankability, reduce financial risks for stakeholders, and enhance the overall resilience of shipbuilding projects in India.

Policy Reset and Vision 2047
Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal stated that these 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 through these schemes is expected to raise India’s commercial shipbuilding capacity to around 4.5 million gross tonnage per annum by 2047.

Conclusion
Both SBFAS and SbDS will remain in force until March 31, 2036, with an in-principle extension envisaged up to 2047. Together, these initiatives signal a long-term commitment to making India a global hub for shipbuilding, fostering innovation, strengthening supply chains, and creating sustainable employment across the maritime industry.