The Ministry of Ports, Shipping, and Waterways (MoPSW) has launched a series of transformative initiatives aimed at modernising the shipbuilding sector, positioning it as a key driver in India’s journey towards sustainability and zero-net carbon emissions.
The government has revised the Shipbuilding Financial Assistance Policy (SBFAP) to foster greater participation in green shipbuilding activities. Introduced in January 2025, the updated policy offers substantial financial incentives for vessels powered by green fuels such as methanol, ammonia, and hydrogen fuel cells. This strategic move aims to reduce the carbon footprint of India’s maritime industry and promote the adoption of eco-friendly India to Lead Green Shipbuilding with New Initiativestechnologies across the shipbuilding ecosystem. In addition to green fuel incentives, the government has rolled out the Green Tug Transition Programme (GTTP), designed to facilitate the shift towards environmentally sustainable tugboat operations. This programme underscores the government’s commitment to reducing carbon emissions and minimising the environmental impact of maritime activities, making sustainability a core focus of India’s shipbuilding agenda.
The government’s revised Right of First Refusal (RoFR) framework prioritises Indian-built, Indian-flagged, and Indian-owned vessels in government tenders. This policy aims to boost the competitiveness of Indian shipyards, enabling them to secure more contracts and expand their technological capabilities. The inclusion of shipyards in the Harmonised Master List of Infrastructure Sub-sectors further streamlines support, allowing for easier access to funding and other growth-enabling initiatives. Strategic partnerships with global maritime leaders are also playing a pivotal role in advancing India’s shipbuilding capabilities. Cochin Shipyard Limited (CSL), a prominent public sector shipyard, has signed Memorandums of Understanding (MoUs) with international firms such as Fincantieri (Italy) and IHC Holland BV. These collaborations are designed to enhance India’s expertise in ship design, construction, and repair, while fostering knowledge exchange and technological innovation.
The introduction of standard tug designs in 2021 by the MoPSW has provided Indian shipyards with a blueprint for building modern, efficient tugs for major ports. This initiative, coupled with investments in shipbuilding clusters, is set to strengthen the industry’s infrastructure and technological capabilities, ensuring the production of high-quality vessels that meet international standards. Moreover, the government’s budget announcement to establish a Maritime Development Fund with a corpus of Rs. 25,000 crores will serve as a catalyst for long-term investments in the maritime sector. This fund aims to support infrastructure projects, promote technological advancements, and encourage private sector participation, thereby creating a robust ecosystem for sustainable maritime growth. The latest revisions to the Shipbuilding Financial Assistance Policy have also introduced incentives for hybrid vessels, with over Rs. 78 crore already disbursed towards their construction. The government’s commitment to maintaining exemptions on Basic Customs Duty (BCD) for raw materials and components used in shipbuilding for the next decade will further reduce costs, making Indian shipyards more competitive globally.
In addition to financial incentives, the government is actively promoting the ‘Make in India’ initiative by encouraging domestic shipyards to take the lead in constructing vessels for government departments and public sector undertakings. This includes the provision of the Right of First Refusal for Indian shipyards in government tenders, fostering a more resilient and self-sufficient maritime industry. India’s strategic initiatives in green shipbuilding reflect a broader vision of sustainable development and environmental stewardship. By prioritising eco-friendly technologies, enhancing domestic shipbuilding capacities, and fostering international collaborations, India is not just aiming to become a leader in shipbuilding but also a global example of how the maritime industry can contribute to a greener planet.
The government’s proactive policies, coupled with significant investments in technology, infrastructure, and skill development, are setting the stage for India to emerge as a global hub for sustainable shipbuilding. As the country sails towards a greener future, its shipbuilding sector is poised to play a pivotal role in shaping the maritime landscape of the 21st century.
India to Lead Green Shipbuilding with New Initiatives
