India bets big on shipbuilding with ₹44,700cr development schemes
What's the story
The Indian government has launched the Shipbuilding Financial Assistance Scheme (SBFAS) and the Shipbuilding Development Scheme (SbDS), with a total outlay of ₹44,700 crore. The schemes are aimed at boosting India's domestic shipbuilding capacity and global competitiveness. Union Minister of Ports, Shipping & Waterways Sarbananda Sonowal said these guidelines would "revive domestic shipbuilding" and position India as a major maritime nation.
Scheme details
SBFAS to provide financial assistance per vessel
Under the SBFAS, which has a total corpus of ₹24,736 crore, the government will provide financial assistance of 15% to 25% per vessel. The exact percentage would depend on the category of the vessel. The scheme offers graded support for small normal, large normal and specialized vessels with stage-wise disbursement linked to defined milestones and backed by security instruments. Series order incentives are also included in this initiative.
Additional initiatives
National Shipbuilding Mission and Shipbreaking Credit Note
The SBFAS also provides for the establishment of a National Shipbuilding Mission. This will ensure coordinated planning and execution of shipbuilding initiatives. Another key feature is the Shipbreaking Credit Note, under which ship owners scrapping vessels at Indian yards will get a credit equal to 40% of the scrap value. This links ship recycling with new ship construction and supports a circular economy approach.
Development focus
SbDS focuses on long-term capacity and capability creation
The Shipbuilding Development Scheme (SbDS), with a budgetary outlay of ₹19,989 crore, focuses on long-term capacity and capability creation. It provides for the development of greenfield shipbuilding clusters and expansion/modernization of existing brownfield shipyards. An India Ship Technology Centre under the Indian Maritime University will also be set up to support research, design, innovation and skills development under this scheme.
Financial assistance
Greenfield clusters to get 100% capital support
Under the SbDS, greenfield shipbuilding clusters will get 100% capital support for common maritime and internal infrastructure through a 50:50 Centre-State special purpose vehicle. Existing shipyards can avail of 25% capital assistance for brownfield expansion of critical infrastructure like dry docks, shiplifts, fabrication facilities and automation systems. Disbursements will be milestone-based and monitored by independent evaluation agencies under this scheme.