The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved a comprehensive package worth Rs 69,725 crore to revitalise India’s shipbuilding and maritime ecosystem, recognising the sector’s strategic and economic importance. This initiative introduces a four-pillar approach designed to strengthen domestic capacity, improve long-term financing, promote greenfield and brownfield shipyard development, enhance technical capabilities and skilling, and implement legal, taxation and policy reforms to build a robust maritime infrastructure.

As part of this package, the Shipbuilding Financial Assistance Scheme (SBFAS) will be extended until 31 March 2036 with a total corpus of Rs 24,736 crore, including a Shipbreaking Credit Note allocation of Rs 4,001 crore to incentivise shipbuilding in India. A National Shipbuilding Mission will also be set up to oversee implementation of these initiatives. In addition, a Maritime Development Fund (MDF) with a corpus of Rs 25,000 crore has been approved to provide long-term financing for the sector. This includes a Maritime Investment Fund of Rs 20,000 crore with 49 percent participation from the Government of India and an Interest Incentivisation Fund of Rs 5,000 crore to reduce the effective cost of debt and improve project bankability. The Shipbuilding Development Scheme (SbDS), with a budgetary outlay of Rs 19,989 crore, aims to expand domestic shipbuilding capacity to 4.5 million gross tonnage annually, support mega shipbuilding clusters and infrastructure expansion, establish the India Ship Technology Centre under the Indian Maritime University, and provide risk coverage including insurance support for shipbuilding projects.

This comprehensive package is expected to unlock 4.5 million gross tonnage of shipbuilding capacity, generate nearly 30 lakh jobs and attract investments of approximately Rs 4.5 lakh crore into India’s maritime sector. Beyond its economic impact, the initiative will strengthen national, energy and food security by bringing resilience to critical supply chains and maritime routes. It will also reinforce India’s geopolitical resilience and strategic self-reliance, advancing the vision of Aatmanirbhar Bharat and positioning the country as a competitive force in global shipping and shipbuilding. With a maritime tradition spanning centuries, India’s seafaring and trade history continues to be a backbone of the economy, supporting nearly 95 percent of the nation’s trade by volume and 70 percent by value. Shipbuilding, often described as the “mother of heavy engineering,” not only drives employment and investment but also enhances national security, strategic independence and the resilience of trade and energy supply chains.