Govt Notifies Shipbuilding Assistance, Development Schemes; ₹44700 crore Outlay to Boost Domestic Capacity
The approved guidelines establish a transparent, milestone-linked, and accountable framework for implementation of the schemes, aligned with the government’s broader objectives of Make in India, Aatmanirbhar Bharat, and long-term maritime capacity building.
New Delhi, December 28: The Ministry of Ports, Shipping and Waterways has notified the operational guidelines for two major shipbuilding initiatives — the Shipbuilding Financial Assistance Scheme (SBFAS) and the Shipbuilding Development Scheme (SbDS) — with a combined outlay of ₹44,700 crore, aimed at strengthening India’s domestic shipbuilding ecosystem and enhancing global competitiveness.
The approved guidelines establish a transparent, milestone-linked, and accountable framework for implementation of the schemes, aligned with the government’s broader objectives of Make in India, Aatmanirbhar Bharat, and long-term maritime capacity building.
Financial assistance for shipbuilding projects
Under SBFAS, which has a total corpus of ₹24,736 crore, the government will provide financial assistance ranging from 15% to 25% of the contract value per vessel, depending on vessel category. The scheme offers graded support for small normal, large normal, and specialised vessels, with stage-wise disbursement linked to clearly defined milestones and supported by appropriate security instruments.
The scheme also provides incentives for series orders and mandates independent valuation and milestone-based assessments to ensure governance, transparency, and efficient use of public funds.
A National Shipbuilding Mission will be established to enable coordinated planning and execution across shipbuilding initiatives.
Circular economy and ship recycling linkage
A key feature of SBFAS is the introduction of a Shipbreaking Credit Note, under which shipowners scrapping vessels at Indian yards will receive a credit equivalent to 40% of the scrap value. This credit can be used for new ship construction, linking ship recycling with shipbuilding and supporting a circular economy approach.
Over the next decade, SBFAS is expected to support shipbuilding projects worth approximately ₹96,000 crore, stimulate domestic manufacturing, and generate employment across the maritime value chain.
Long-term capacity creation under SbDS
The Shipbuilding Development Scheme (SbDS), with a budgetary outlay of ₹19,989 crore, focuses on long-term infrastructure and capability creation. The scheme provides for the development of greenfield shipbuilding clusters, expansion and modernisation of existing brownfield shipyards, and establishment of an India Ship Technology Centre under the Indian Maritime University to support research, design, innovation, and skills development.
Greenfield shipbuilding clusters will receive 100% capital support for common maritime and internal infrastructure through a 50:50 Centre–State special purpose vehicle. Existing shipyards will be eligible for 25% capital assistance for brownfield expansion of critical infrastructure such as dry docks, shiplifts, fabrication facilities, and automation systems. All disbursements will be milestone-based and monitored by independent evaluation agencies.
The scheme also includes a Credit Risk Coverage Framework, offering government-backed insurance for pre-shipment, post-shipment, and vendor-default risks to improve project bankability and financial resilience.
Capacity expansion and national vision
According to the ministry, India’s commercial shipbuilding capacity is projected to rise to about 4.5 million gross tonnage per annum by 2047, supported by modern infrastructure and a skilled workforce.
Sarbananda Sonowal, minister of ports, shipping and waterways, said the guidelines provide a decisive policy reset for the sector.
“Prime Minister Narendra Modi ji’s leadership has given India’s shipbuilding sector a stable and transparent framework that will revive domestic shipbuilding, boost investment, strengthen forward and backward linkages, and build world-class capacity,” he said.
He added, “Viksit Bharat is about reclaiming India’s industrial confidence. By strengthening shipbuilding and maritime capabilities, PM Narendra Modi ji has ensured that India’s growth is anchored in self-reliance, skill, and global competitiveness — true to the spirit of Aatmanirbhar Bharat.”
Both SBFAS and SbDS will remain valid until March 31, 2036, with an in-principle extension envisaged up to 2047. The guidelines have been formally approved and published on the ministry’s official website to enable structured and transparent implementation.
