India is set to boost its shipbuilding with the announcement of a ₹25,000 crore ($2.9bln) Maritime Development Fund (MDF).
Shri Sarbananda Sonowal, the Union Minister of Ports, Shipping & Waterways, welcomed the budget presented in Parliament on February 1 and congratulated the finance minister Nirmala Sitharaman ji for presenting a “forward-looking budget.”
The Union Budget proposes to set up a Maritime Development Fund to support India’s maritime sector by providing financial assistance, via equity or debt securities. The initial corpus of the fund is pegged at ₹25,000 crores where the government contribution will be 49%.
The remaining balance will be contributed by major port authorities, other government entities, Central PSEs, financial institutions as well as the private sector.
The minister Shri Sarbananda Sonowal said: “It is reassuring to see that the budgetary initiatives for India’s marine sector are focused on unlocking its vast potential and enhancing existing assets through upgrades, modernisation, and automation. A key highlight is our ministry’s development of new shipbuilding clusters of 1.0 to 1.2 million gross tonnage (GT) each.
“This strategic push is crucial in realising India’s vision of becoming a $30 trillion economy by 2047. By leveraging the public-private partnership (PPP) model, the scheme is designed to attract private investment, promote modernisation, and advance green technologies. These efforts will enhance India’s global competitiveness, drive sustainable growth, and solidify its position as a leading global maritime hub.”
The Union Budget has also extended the Shipbuilding Financial Assistance Policy (SBFAP) 2.0, aimed at providing direct financial subsidies to Indian shipyards. Another innovative scheme announced in the budget is the Shipbreaking Credit note.
The budget also allocated specific funds for training and development of human resources.
Shri Sarbananda Sonowal added in his statement: “India’s maritime sector has witnessed significant progress since 2014, and with the latest announcements by the finance minister, we are confident that the shipbuilding industry will serve as a catalyst for economic growth. While the Shipbuilding Financial Assistance Policy (SBFAP) is designed to provide financial incentives to Indian shipyards, the Ship-breaking Credit Note further strengthens the domestic industry by encouraging investment and expansion.
“These measures are expected to drive capital inflows, create employment opportunities, and enhance sectoral competitiveness. Additionally, a renewed focus on training and human capital development will ensure a skilled workforce, equipping professionals with expertise in modern shipbuilding technologies, automation, and sustainable maritime practices.”
