The Union government is finalising the operational framework for the ₹19,989-crore Shipbuilding Development Scheme approved by the Cabinet in September, with a strong focus on expanding domestic shipbuilding capacity through both brownfield modernisation and greenfield shipbuilding clusters.
Under the proposed plan, existing shipyards will be eligible for capital assistance of up to 25 per cent of the Fair Assessed Project Cost, subject to a ceiling of ₹1,500 crore per shipyard, for modernising and expanding capacity. The scheme aims to support the creation of 4.5 million gross tonnage (GT) of shipbuilding capacity per annum.
To qualify for brownfield expansion support, a shipyard must be a registered company and operational for at least three years. Capacity expansions can be undertaken anywhere in India, and subsidiaries or joint ventures are eligible provided the shipyard holds a minimum 50 per cent equity stake. The capital support will be released in four milestone-linked tranches of 30 per cent, 25 per cent, 25 per cent and 20 per cent.
The grant for brownfield projects will cover infrastructure such as channel and basin development, dry docks, slipways, ship lifts, floating docks, jetties, cranes, modular fabrication facilities, and automation and digitisation. However, land acquisition costs and maintenance or repair of existing facilities are excluded.
For greenfield shipbuilding clusters in coastal states, the Centre will provide capital support without prescribing a fixed percentage or upper cap. Capital assistance will be available for Detailed Project Reports (DPRs) submitted between September 24, 2025, and March 31, 2036. Each greenfield cluster must house at least one anchor shipyard with an annual capacity of 0.5 million GT within ten years.
Greenfield clusters will be developed through Special Purpose Vehicles (SPVs) formed as 50:50 joint ventures between the Centre and state agencies, with private shipyard partners required to have at least five years of experience. State governments will provide land at a nominal cost, and the project sites will be developed and operated on a 60-year lease model. Funds will be disbursed in four tranches, aligned with project milestones.
Central support for greenfield clusters will cover maritime infrastructure such as basins, breakwaters, channels and land reclamation, along with regional capability development centres, common maritime assets including barges and floating cranes, and internal infrastructure and utilities. All remaining costs will be met by the SPV through a mix of equity, debt and state grants, while individual shipyard facilities will be funded by private partners.
According to the plan, the Centre will prioritise greenfield proposals that offer strong enabling conditions, including land availability, state-level facilitation, connectivity infrastructure and policy support, as well as those that attract shipyard interest, promote ancillary industries, encourage skill development and adopt green shipbuilding practices. The detailed guidelines are expected to be announced shortly.
