In a significant move aimed at fostering India’s blue economy and positioning the nation as a global manufacturing hub for ships, the government is contemplating additional incentives for manufacturers.
Among the proposed measures is the introduction of a new financial support mechanism under the viability gap funding (VGF) route, alongside enhancing existing schemes. The Ministry of Ports, Shipping, and Waterways is actively exploring various schemes to incentivize ship manufacturing in the country. This strategic initiative underscores the government’s commitment to bolstering India’s maritime sector and driving economic growth. Under the existing Ship Building Financial Assistance (SBFA) scheme, the government is considering reinstating incentives in the form of 20% capital support for all types of shipbuilding activities. Moreover, the duration of incentives may be extended by four years to align with the Maritime India Vision 2030, which aims to develop world-class ports and modernize maritime infrastructure.
Additionally, plans are underway to introduce a new VGF scheme with a proposed ₹5,000-crore package to incentivize the construction of inland vessels. This support is expected to be extended to entities manufacturing sea-bound vessels, including cruise ships, in the future. The need for expanding ship manufacturing in India is underscored by the growing demand from overseas markets. Indian shipyards have been attracting large orders from countries such as Norway, Germany, the US, the Netherlands, Denmark, and West Asia. Furthermore, contracts from neighboring countries like Bangladesh, Sri Lanka, and Myanmar highlight India’s emerging prowess in shipbuilding.
Despite the progress, India currently holds less than 1% share of the global shipbuilding market, which is dominated by China, South Korea, and Japan. However, with strategic initiatives like enhanced incentives and VGF support, India aims to strengthen its position in the global arena. As per ministry data, India’s shipping fleet witnessed marginal growth, reflecting the nation’s increasing maritime activities. However, the age profile of Indian merchant shipping vessels indicates a need for significant replacements in the coming years, presenting opportunities for further growth and modernization in the shipbuilding sector. In conclusion, the government’s proposed measures signal a renewed focus on advancing India’s shipbuilding capabilities and fostering sustainable growth in the maritime industry.
