The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a comprehensive package worth Rs.69,725 crore aimed at revitalising India’s maritime sector. The initiative, designed to enhance shipbuilding, maritime financing, and domestic capacity, is built on a four-pillar strategy encompassing financing, infrastructure, technical development, and policy reforms.
This ambitious plan seeks to strengthen India’s maritime industry, which plays a critical role in the nation’s economy and global trade. A key component of the package is the extension of the Shipbuilding Financial Assistance Scheme (SBFAS) until March 31, 2036, with a total corpus of Rs 24,736 crore.
This scheme is intended to provide financial support to bolster the shipbuilding industry. Additionally, a Shipbreaking Credit Note worth Rs 4,001 crore was introduced to promote sustainable practices within the sector, encouraging environmentally responsible shipbreaking processes.
To ensure effective implementation, the Cabinet approved the establishment of a National Shipbuilding Mission, which will oversee the execution of the various initiatives under the package. A significant highlight is the creation of a Maritime Development Fund (MDF) with a corpus of Rs 25,000 crore. This fund includes a Maritime Investment Fund of Rs 20,000 crore, with 49pc government participation, and an Interest Incentivisation Fund of Rs 5,000 crore designed to reduce borrowing costs for maritime projects, making financing more accessible for stakeholders.
The Cabinet also greenlit the Shipbuilding Development Scheme (SbDS), with an allocation of Rs 19,989 crore, aimed at significantly expanding India’s domestic shipbuilding capacity to 4.5 million gross tonnage annually.
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The scheme will promote the development of mega shipbuilding clusters, enhance infrastructure, and facilitate the establishment of the India Ship Technology Centre under the Indian Maritime University. Additionally, it will provide risk coverage, including insurance support for shipbuilding projects, to mitigate financial uncertainties and encourage investment.
The comprehensive package is projected to unlock investments worth Rs 4.5 lakh crore, generate approximately 30 lakh jobs, and create an additional 4.5 million gross tonnes of shipbuilding capacity. These outcomes are expected to significantly boost India’s maritime capabilities and economic growth.
India’s maritime sector, with a rich history of centuries of trade and seafaring, remains a cornerstone of the economy, handling nearly 95pc of the country’s trade by volume and 70pc by value. The shipbuilding industry, often referred to as the “mother of heavy engineering”, plays a vital role in generating employment, attracting investment, and ensuring national security. It also strengthens the resilience of trade and energy supply chains, underscoring its strategic importance to India’s economic and geopolitical objectives.
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