With the Centre speeding up efforts to build a world-class maritime ecosystem, India's shipbuilding industry is undergoing a transformational shift, according to Sarbananda Sonowal, the Union Minister of Ports, Shipping & Waterways (MoPSW). The Union Minister was speaking in the Lok Sabha in response to a starred question by Dr Rajeev Bharadwaj, MP from Kangra LSC at the ongoing monsoon session.
Sonowal said the government is revamping the Shipbuilding Financial Assistance Policy to address cost disadvantages, thereby helping Indian shipyards compete on equal footing with their international counterparts. The inclusion of credit notes for ship breaking in Indian yards reinforces the push towards a circular and sustainable maritime economy, he added.
The minister said large ships above a specified size will now be classified under the Infrastructure Harmonised Master List in a bid to boost infrastructure financing, making them eligible for long-term, low-interest funding. In the mean time, the Centre will develop integrated shipbuilding clusters, which will have modern infrastructure, skill development centres, and advanced technologies, he pointed out
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In a landmark move to address the industry's need for long-term capital, the government has proposed a ₹25,000 crore Maritime Development Fund, with up to 49 per cent government contribution. This fund will mobilise private and port-led investments to expand and modernise India's shipbuilding and repair capabilities.
Recognising the long gestation nature of the industry, tax exemptions on Basic Customs Duty (BCD) for raw materials and components used in shipbuilding and ship-breaking have been extended for another 10 years. “Our commitment to empower and enable our maritime sector is absolute and it is with this intent we are working under the dynamic leadership of Prime Minister Shri Narendra Modi ji," said Sarbananda Sonowal.
These budgetary measures are in addition to the ongoing reforms that are already reshaping the sector. Indian shipyards are currently being provided financial assistance for contracts signed between April 1, 2016, and March 31, 2026. This means that they get institutional finance at favourable terms, and issue infrastructure bonds, thereby helping with capacity enhancement.
To give Indian shipbuilders a competitive edge in public procurement, the government has extended the Right of First Refusal (ROFR) for tenders floated by public sector units. As per the Public Procurement (Preference to Make in India) Order 2017, vessels valued under ₹200 crore must be procured from Indian yards, thereby reinforcing the goal of self-reliance in maritime assets.
“In line with Prime Minister Modi's call for efficiency and standardisation, five standardised tug designs have been released for use by major ports. These designs, to be built exclusively in Indian shipyards, are expected to streamline procurement processes and improve cost-effectiveness,” said Sonowal.
On the ship repair front, Cochin Shipyard Limited has inaugurated a ₹970 crore International Ship Repair Facility (ISRF) in Kochi. This facility marks a significant upgrade in India's maritime infrastructure, reducing dependency on foreign repair docks and positioning India as a regional hub for ship maintenance, the minister stated. Both CSL and Mazagon Dock Shipbuilders Limited (MDL) are registered under the Prime Minister's Internship Scheme, offering young Indians hands-on exposure to the latest in shipbuilding and marine engineering.