The Union Cabinet has approved a comprehensive ₹70,000 crore package for the shipping and maritime sectors, which includes three key schemes aimed at boosting shipbuilding and creating value chains. According to Shipping Secretary T.K. Ramachandran, companies will be able to avail incentives from all schemes simultaneously. The package includes the National Shipbuilding Mission, a ₹24,736 crore Shipbuilding Financial Assistance Scheme (SBFAS), a ₹25,000 crore Maritime Development Fund (MDF), and a ₹19,989 crore Shipbuilding Development Scheme (SbDS).
The government is also actively wooing global shipbuilding giants from countries like Japan and South Korea to set up operations in India, with guidelines for the mission being prepared and locations across several states being evaluated for new shipbuilding clusters. These clusters, which will be governed by Special Purpose Vehicles with central and state equity, are intended to provide the necessary infrastructure, such as roads and land, to create a favorable ecosystem.
A unique component of the package is a ship-breaking credit note scheme, which offers 40% of the vessel’s scrap value when it is recycled in an Indian yard. This amount is reimbursable against the cost of constructing a new vessel in a domestic shipyard. The scheme has already generated significant interest from global players, as India’s ship recycling industry is now compliant with the Hong Kong Convention.