Govt to boost production of Made-in-India merchant vessels, cut reliance on foreign ships

By Admin

22 May, 2025

In a bold and strategic move, the Government of India has initiated an ambitious plan to significantly ramp up the production of ‘Made-in-India’ merchant vessels, aiming to reduce reliance on foreign ships and position the country as a leading maritime power. This mission is not just about strengthening trade routes, but also about reinforcing national security, self-reliance, and economic resilience.

A Strategic Need for Indigenous Ships

The recent escalation between India and Pakistan underscored the vulnerability of India’s trade routes, heavily reliant on foreign vessels. During such geopolitical tensions, foreign ships might avoid Indian ports, potentially crippling trade operations. Recognizing this, the government sees a robust domestic merchant fleet as essential for maintaining trade continuity and securing economic interests in emergencies.

“A strong fleet of Indian-made ships will ensure that our global trade is safeguarded in times of crisis,” stated a senior official from the Ministry of Ports, Shipping and Waterways. This shift aligns with India's broader vision of becoming a developed nation by 2047 and a top maritime nation within the next two decades.

Building the Future: Indigenous Shipbuilding and Repair

India’s potential as a global shipbuilding hub is immense. With a strategic geographical location, a skilled workforce, cost advantages, and a strong steel industry, the country is now poised to transform its shipbuilding capabilities. Union Minister Sarbananda Sonowal emphasized, “India has everything it requires to be a global shipbuilding powerhouse.”

To propel this transformation, the government has launched several key initiatives:

• Maritime Development Fund (Rs 25,000 crore): Offers long-term, low-cost financing for shipbuilding, ship repair, and maritime infrastructure. The government will contribute 49% of this fund, while the rest will be sourced from ports and private players, potentially attracting investments of Rs 1.5 lakh crore by 2030.
  
  

• Shipbuilding Financial Assistance Policy (SBFAP) 2.0: With an outlay of Rs 18,090 crore, it provides direct subsidies to Indian shipyards to enhance their competitiveness on the global stage.
  
  

• Shipbreaking Credit Note Scheme: Promotes sustainable practices by offering a 40% credit on scrap value of old ships, usable towards purchasing new Indian-built vessels.
  
  

• Customs Duty Exemptions: Extended for 10 years on inputs used in shipbuilding and shipbreaking, further reducing costs and encouraging local manufacturing.
  
  

Creating a Maritime Ecosystem: Shipbuilding, Repairing, and Recycling

India already holds a strong position in the ship recycling industry. In 2024, the country ranked second globally in ship recycling, with a 33% market share. The Alang Ship Breaking Yard in Gujarat plays a central role in this sector. Now, the government's focus is on expanding this leadership to shipbuilding and repairing, forming a triad of maritime strength.

Financial Reforms and Strategic Collaborations

Another major development is the incorporation of SCI Bharat IFSC Ltd in GIFT City, Gandhinagar. This new shipping company will focus on leasing, chartering, and owning vessels under the IFSC’s ship leasing framework. Collaborating with state-run oil, gas, and fertiliser companies, this initiative aims to add at least 1,000 Indian ships to the national fleet over the next decade.

According to the ministry note, this expansion is expected to cut freight costs by at least 33% by 2047, enhancing India’s global trade competitiveness.

Charting the Course to 2047

With a clear roadmap and powerful policy tools, India is determined to break into the top 10 shipbuilding nations by 2030, and into the top 5 by 2047. These goals are part of a larger vision where India no longer depends on external resources for maritime mobility but instead emerges as a global hub for shipbuilding, repairing, and recycling.

The journey is ambitious but necessary. As India steers towards maritime self-reliance, it is not just building ships — it is building a legacy of strength, sustainability, and strategic autonomy on the high seas.