India’s shipbuilding sector is steering toward major structural transformation, with the Union Government introducing sweeping reforms aimed at building global competitiveness and self-reliance, Union Minister Sarbananda Sonowal told Parliament during the ongoing monsoon session.
Responding to a starred question by Dr Rajeev Bharadwaj, MP from Kangra, the Union Minister of Ports, Shipping & Waterways (MoPSW) said the recent measures align with the long-term vision of Viksit Bharat 2047 and the Maritime India Vision 2030, as outlined in the Union Budget 2025.
The focus? Making Indian shipyards globally competitive through targeted financial incentives, expanded infrastructure access, and streamlined procurement rules.
Financial Support and Infrastructure Status
The Shipbuilding Financial Assistance Policy is being revamped to reduce cost disadvantages faced by Indian yards in global markets. It includes new credit note provisions for ship breaking, promoting a circular maritime economy.
Large ships above a specified size have now been added to the Infrastructure Harmonised Master List, allowing shipbuilding companies to access long-term, low-interest institutional finance. This change opens the door for more favorable lending terms and the issuance of infrastructure bonds—key to scaling up production capacity.
The Budget also prioritizes the development of integrated shipbuilding clusters, which will include advanced infrastructure, skill training facilities, and access to emerging technologies. These clusters aim to diversify and scale the types of vessels being built domestically.
₹25,000 Crore Maritime Development Fund
A major highlight is the proposal of a ₹25,000 crore Maritime Development Fund, with up to 49% government participation. The fund is intended to attract private and port-led investments, and bridge long-term capital gaps in the sector. It’s designed to support both shipbuilding and repair facilities—areas where India is looking to expand regional market share.
Customs Duty Exemptions Extended
The government has extended the Basic Customs Duty (BCD) exemptions on raw materials and components used in shipbuilding and ship-breaking for another ten years. This aims to reduce input costs and enhance the competitiveness of domestic production, especially in comparison to East Asian shipyards.
Public Procurement Preferences and Tug Standardization
To support Indian yards in securing government contracts, the Right of First Refusal (ROFR) remains in effect for tenders floated by public sector units. In line with the Public Procurement (Preference to Make in India) Order 2017, contracts valued under ₹200 crore are reserved for domestic shipbuilders.
To simplify procurement and standardize performance, five standardized tug designs have been introduced. These tugs will be constructed exclusively in Indian shipyards, improving cost-effectiveness and delivery timelines across major ports.
Expansion in Ship Repair Capabilities
On the ship repair front, Cochin Shipyard Limited (CSL) recently inaugurated a ₹970 crore International Ship Repair Facility (ISRF) in Kochi. This facility will reduce reliance on foreign repair docks, support faster turnaround times, and position India as a regional ship maintenance hub in the Indian Ocean.
Skill Development and Internships
Cochin Shipyard Limited (CSL) and Mazagon Dock Shipbuilders Limited (MDL) have been registered under the Prime Minister’s Internship Scheme. The initiative provides practical, hands-on training in shipbuilding and marine engineering, allowing the next generation of maritime professionals to gain early exposure to the industry.
Highlighting these developments, Sarbananda Sonowal stated: “Prime Minister Narendra Modi ji’s vision for Viksit Bharat places the maritime sector at the heart of India’s economic resurgence. A strong, self-reliant shipbuilding industry will not only generate employment but will also enhance our strategic and commercial standing on the global stage. India is not just building ships; we are building a resilient future.”
Indian shipbuilders also continue to receive financial assistance for contracts signed between April 1, 2016, and March 31, 2026. These include benefits unlocked by the grant of infrastructure status—an essential step that improves access to capital markets and boosts investor confidence in the sector.
