In a major push to revitalise its maritime sector, the Indian government has officially released the detailed operational guidelines for two landmark shipbuilding initiatives. With a combined financial outlay exceeding ₹44,700 crore, these schemes are designed to transform India's domestic shipbuilding ecosystem and enhance its position in the global market.
Two-Pronged Strategy for Maritime Revival
The Ministry of Ports, Shipping and Waterways (MoPSW) has notified the guidelines for the Shipbuilding Financial Assistance Scheme (SBFAS) and the Shipbuilding Development Scheme (SbDS). Union Minister Sarbananda Sonowal stated that these initiatives will create a stable and transparent framework to revive domestic shipbuilding while strengthening industrial linkages across the value chain.
The SBFAS, backed by a substantial corpus of ₹24,736 crore, will provide direct financial support to shipbuilders. The assistance will range from 15% to 25% of the contract value per vessel, depending on its category—small normal, large normal, or specialised vessels. Disbursements will be stage-wise, linked to pre-defined milestones and secured by appropriate instruments. The scheme also incorporates incentives for series orders to encourage bulk production.
Building Long-Term Capacity and Infrastructure
The second pillar, the Shipbuilding Development Scheme (SbDS), has a budgetary allocation of ₹19,989 crore. It focuses on long-term capacity and capability building. A key component is the development of greenfield shipbuilding clusters, which will receive 100% capital support for common maritime and internal infrastructure through a 50:50 Centre-state special purpose vehicle (SPV).
For existing brownfield shipyards, the scheme offers 25% capital assistance for expanding critical infrastructure like dry docks, shiplifts, and automated fabrication facilities. Furthermore, the SbDS mandates the establishment of an India Ship Technology Centre under the Indian Maritime University to drive research, design innovation, and skill development.
Governance, Employment, and Future Projections
To ensure robust governance and efficient use of public funds, the ministry has made independent valuation and milestone-based assessments mandatory for both schemes. In a move to promote a circular economy, a novel shipbreaking credit note mechanism has been introduced. Ship owners who scrap their old vessels at Indian yards will receive a credit equivalent to 40% of the scrap value, which can be linked to commissioning new ships.
The schemes also provide for a National Shipbuilding Mission to ensure coordinated planning and execution. The impact is projected to be significant: over the next decade, SBFAS alone is expected to catalyse shipbuilding projects worth about ₹96,000 crore. Collectively, the initiatives are set to generate extensive employment, promote indigenous technology, and strengthen India's maritime security.
The government aims to increase the country's commercial shipbuilding capacity to approximately 4.5 million gross tonnage per annum by 2047. Both the SBFAS and SbDS will remain valid until March 31, 2036, with an in-principle provision for extension up to 2047, ensuring long-term policy stability for investors and the industry.
