India Plans ₹16,000 Crore Boost to Expand Shipbuilding Capacity and Attract Global Investment
The Indian government is taking significant steps to position India as a leading player in the global shipbuilding industry with a bold new ₹16,000 crore policy initiative. As the demand for new vessels soars worldwide, India aims to modernise and expand its existing shipbuilding yards while developing new clusters in strategic coastal regions such as Andhra Pradesh and Odisha. This comes at a time when the global shipbuilding industry is facing capacity constraints, especially in China, creating a window of opportunity for India to step in and capture a larger share of the market.
The Ministry of Ports, Shipping, and Waterways is already working on the funding and operational details for this expansive initiative. The proposed policy aims to address existing capacity limitations at state-run shipyards, which currently lack the scale to meet the rising global demand. The government’s strategic move aims to cater to major shipping companies such as the Mediterranean Shipping Company (MSC), which has expressed interest in expanding its operations in India. China’s shipbuilding industry is operating at full capacity for the foreseeable future, leaving a significant gap in global shipbuilding that India seeks to fill. Major international players, including MSC, are exploring opportunities in India as they look to place large-scale orders. However, India currently lacks the capacity and expertise to fulfil such orders at the scale required. For example, if MSC were to place an order for 50-60 vessels, India’s existing shipyards would be unable to handle such an ambitious request. This has prompted the Indian government to rework its policy framework to meet the growing demands of the global shipping industry.
The ₹16,000 crore initiative is set to modernise India’s shipbuilding capabilities by expanding capacity, upgrading infrastructure, and fostering the creation of world-class shipbuilding clusters. These clusters will be strategically placed in key coastal states, such as Gujarat, Andhra Pradesh, and Odisha. Additionally, India is poised to attract foreign investment, with international shipping giants, including MSC and European firms from France and Denmark, showing significant interest in setting up operations in the country. MSC has already held discussions regarding the establishment of a greenfield shipbuilding and repair yard, most likely in Gujarat. Such investments would not only increase shipbuilding capacity but also create significant employment opportunities and boost India’s maritime infrastructure.
This ambitious initiative is set to complement existing schemes like the ₹25,000 crore Maritime Development Fund and the ₹18,000 crore Shipbuilding Financial Assistance Policy (SBFA 2.0), which is awaiting Cabinet approval. The government also plans to focus on skill development, technology upgrades, and the enhancement of critical infrastructure such as breakwaters, which protect harbours and facilitate safe docking for ships. In addition to domestic efforts, the Indian government is actively engaging with shipbuilders from South Korea and Japan. Delegations from these countries are expected to visit India soon to explore investment opportunities in India’s growing shipbuilding sector. The new policy aims to offer financial support by sharing up to 50% of the financial burden, potentially amounting to ₹8,000 crore. The remainder of the funding is expected to come from multilateral agencies, financial institutions, and soft-loan arrangements.
With an eye on global competitiveness, this initiative aims to elevate India’s position in the international maritime sector. The government’s strategy to develop world-class shipbuilding clusters in India and attract foreign investment aligns with the broader objective of making India a key player in global trade and logistics. As the global demand for shipping vessels grows, India’s plans to modernise and expand its shipbuilding capacity come at a pivotal moment. If successful, this ambitious initiative could not only meet domestic and international demand but also make India a hub for shipbuilding and maritime infrastructure, boosting its economy and establishing the country as a global maritime powerhouse.
