Prime Minister Narendra Modi-led Cabinet on Wednesday announced Rs 69,725 crore reforms in the shipbuilding and maritime development sector.
The initiative aims to enhance India’s shipbuilding and maritime infrastructure. This strategic package incorporates four key elements focused on strengthening domestic capabilities, enhancing financial frameworks, supporting shipyard expansion, developing technical expertise, and implementing regulatory reforms.
Calling shipbuilding the ‘mother of heavy engineering industry’, Railway and I&B minister Ashwini Vaishnaw said that the investment multiplier of the sector is 1.8, and the employment multiplier is 6.4.
This initiative is projected to create 30 lakh employment opportunities and draw investments of Rs 4.5 lakh crore. The programme extends beyond economic benefits, enhancing the nation's security framework across energy and food sectors by fortifying vital supply chains and sea routes.
Additionally, it supports India's strategic autonomy and the Aatmanirbhar Bharat initiative, whilst elevating the country's standing in international maritime commerce and shipbuilding.
Shipbuilding and maritime development reforms: Top points
- Pillar 1: Shipbuilding Financial Assistance Scheme (Rs 24,736 crore)
The government has extended the Shipbuilding Financial Assistance Scheme (SBFAS) through March 31, 2036, allocating Rs 24,736 crore to support domestic shipbuilding activities. Additionally, Rs 4,001 crore has been designated for a Shipbreaking Credit Note programme. To coordinate these initiatives effectively, authorities will establish a National Shipbuilding Mission to supervise the implementation of all associated programmes.
- Pillar 2: Maritime Development Fund (Rs 25,000 crore)
The government has sanctioned the Maritime Development Fund (MDF), allocating Rs 25,000 crore for extended financing in the maritime sector. The fund comprises two components: a Maritime Investment Fund of Rs 20,000 crore, where the Government of India holds a 49% stake, and an Interest Incentivization Fund of Rs 5,000 crore, designed to lower debt costs and enhance project viability.
- Pillar 3: Shipbuilding Development Scheme (Rs 19,989 crore)
Additionally, the government has introduced the Shipbuilding Development Scheme (SbDS) with Rs 19,989 crore funding. This scheme aims to boost domestic shipbuilding capacity to 4.5 million Gross Tonnage per year.
- Pillar 4: Legal, policy and process reforms
The initiative supports large shipbuilding clusters, infrastructure growth, and establishes the India Ship Technology Centre under the Indian Maritime University, whilst offering risk coverage and insurance support for shipbuilding ventures.
The TOI Business Desk is a vigilant and dedicated team of journal...
Read MoreThe TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports and breaking stories that impact businesses and economies. With a mission to provide valuable insights and updates, the desk ensures that TOI readers are well-informed about the ever-changing and dynamic world of commerce and can navigate the complexities of the business world.
Read Less