Cabinet approves Rs 697,250 million package to propel maritime sector

The Union cabinet, chaired by Prime Minister Narendra Modi, on 24 of September approved a Rs 69,725 crore (Rs 697.25 billion) package for the nation’s shipbuilding and maritime sector.

“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,” said an official statement.

The package is projected to unlock 4.5 million gross tonnage of shipbuilding capacity, generate a staggering 30 lakh jobs, and attract investments of approximately Rs 4.5 lakh crore (Rs 4.5 trillion) into the maritime ecosystem.

The statement further added that, a central feature of the plan is the extension of the Shipbuilding Financial Assistance Scheme (SBFAS) until March 31, 2036, with a total corpus of Rs 24,736 crore (Rs 247.36 billion).

Taking the social media platform, Shipping Minister Sabarnanda Sonowal said, “This is a giant leap towards Aatmanirbhar Shipping & our aim of becoming a top 5 shipbuilding nation by 2047”.

This scheme is designed to incentivize domestic shipbuilding and includes a Rs 4,001 crore (Rs 40.01 billion) allocation for a shipbreaking credit note, encouraging the recycling of vessels within India. A new national shipbuilding mission will be established to ensure the seamless implementation of all initiatives.

To address the long-standing challenge of financing, the cabinet has also approved the creation of a Maritime Development Fund (MDF) with a corpus of Rs 25,000 crore (Rs 250 billion).

This fund will include a maritime Investment fund of Rs 20,000 crore (Rs 200 billion), with 49% government participation, and an Interest incentivization fund of Rs 5,000 crore (Rs 50 billion), aimed at lowering the cost of debt and improving the bankability of maritime projects.

Additionally, the Shipbuilding Development Scheme (SbDS), with a budgetary outlay of Rs 19,989 crore (Rs 199.89 billion), will spearhead the expansion of domestic shipbuilding capacity to 4.5 million gross tonnage annually.

The scheme will support the development of mega shipbuilding clusters, fund infrastructure expansion, and establish the India Ship Technology Centre under the Indian Maritime University to boost technical capabilities and skilling.

Strategic initiative to boost its maritime sector is built on its natural strengths, including an extensive 11,098 km coastline and over 200 ports. According to an NCAER logistics report, coastal traffic has shown strong growth, especially at non-major ports.

The government aims to capitalize on this by setting an ambitious goal to increase coastal cargo volumes to 1,300 million tonnes by 2047, a key objective of its Maritime Amrit Kaal Vision.