Cabinet Approves ₹69,725 Crore Package For Shipbuilding And Maritime Sector Development

(MENAFN- Live Mint) In a major boost to the maritime sector, the Union Cabinet led by Prime Minister Narendra Modi has approved a ₹69,725 crore package for India's shipbuilding industry, focusing on domestic capacity, financing, shipyard development, technical skills, and policy reforms.

“The package 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 create a robust maritime infrastructure,” the Cabinet said in a release issued on Wednesday, September 24.

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The Shipbuilding Financial Assistance Scheme (SBFAS) will be extended until March 31, 2036, with a total fund of ₹24,736 crore. The scheme's goal is to encourage shipbuilding in India. Additionally, a National Shipbuilding Mission will be set up to manage all related initiatives.

A Maritime Development Fund (MDF) has been approved, with a corpus of ₹25,000 crore, to support long-term financing in the sector. It comprises a ₹20,000 crore Maritime Investment Fund, with 49% participation from the government and a ₹5,000 crore Interest Incentivization Fund aimed at lowering debt costs and improving the financial feasibility of the project.

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A Shipbuilding Development Scheme, with a budget of ₹19,989 crore, plans to increase domestic shipbuilding capacity to 4.5 million Gross Tonnage per year. It aims to boost mega shipbuilding clusters, expand infrastructure, establish the India Ship Technology Centre under the Indian Maritime University, and offer risk coverage, including insurance support for shipbuilding projects.

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The government noted that the proposed package could drive 4.5 million gross tonnage of shipbuilding capacity, create nearly 30 lakh jobs, and attract around ₹4.5 lakh crore in investments into India's maritime industry.

Apart from its economic impact, the package is expected to strengthen national, energy, and food security by bringing resilience to critical supply chains and maritime routes, the government said.

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