The Ministry of Ports, Shipping and Waterways has notified comprehensive guidelines for implementing a ₹69,725 crore shipbuilding and maritime development package cleared by the Union Cabinet in September, marking a major step towards India’s ambition of becoming one of the world’s top 10 ship-owning and shipbuilding nations by 2030 and top five by 2047.
Finalised on December 26 after extensive stakeholder consultations, the guidelines cover shipbuilding financial assistance, development of greenfield shipbuilding clusters, expansion of brownfield yards and a shipbuilding credit risk coverage scheme.
Ambitious capacity targets
Under the long-term vision, India aims to increase its ship ownership seven-fold to about 100 million Gross Tonnage (GT) by 2047 and scale up shipbuilding output nearly 40 times to 4.5 million GT by 2037.
Shipbuilding Financial Assistance Scheme
The Shipbuilding Financial Assistance Scheme (SBFAS) will apply to shipbuilding contracts signed between September 24, 2025 and March 31, 2036. A budget of ₹20,416 crore has been earmarked, with a focus on large, green and specialised vessels.
For small normal vessels costing up to ₹100 crore, financial assistance will be capped at 15% of the actual value. For large normal vessels costing over ₹100 crore, assistance will be 15% on the first ₹100 crore and 20% on the balance. Specialised vessels will attract higher support, with 15% on the first ₹100 crore and 25% on the remaining cost.
The aid will be disbursed in three tranches to manage cash flow—30% at keel laying, 40% at launching and 30% on delivery—against suitable security.
Government, PSU and export orders, including export orders for foreign armed forces (excluding weapons and sensors), will be eligible. For defence export orders, assistance will be capped at ₹200 crore per vessel, subject to an overall ceiling of ₹2,000 crore.
Strict delivery timelines have been prescribed, with provisions for extensions in force majeure situations. Failure to meet eligible timelines will require shipyards to refund the assistance with 9% annual interest.
Shipbreaking Credit Notes introduced
The guidelines also introduce Shipbreaking Credit Notes to incentivise recycling in Hong Kong Convention-compliant Indian yards. Any Indian or foreign-flagged vessel scrapped in such yards will be eligible for a credit note equivalent to 40% of its fair scrap value, valid for three years.
These notes can be redeemed against new ship orders at Indian shipyards, up to a maximum of 5% of the fair price of the new vessel. Credit notes can be stacked, transferred or sold in the open market. A third-party mechanism will determine quarterly Light Displacement Tonnage (LDT) prices for scrap valuation.
Risk coverage and yard expansion
A dedicated credit risk coverage scheme will protect shipyards against buyer defaults, cancellations, post-delivery payment disputes and vendor failures during construction.
For capacity expansion, government capital assistance for brownfield shipyards will be capped at ₹1,500 crore per yard.
Greenfield shipbuilding clusters
The Centre plans to develop three to four greenfield shipbuilding clusters across the country, limited to one per state. Each cluster will feature about 2 km of waterfront and 2,000 acres of land, equally split between shipyards and ancillary industries and infrastructure.
Each cluster will have a capacity of around 1.2 million GT per annum, anchored by at least one large shipyard with a design capacity of 0.5 million GT per annum to be achieved within 10 years. The scheme provides 100% capital assistance for eligible components of approved greenfield clusters.
With these guidelines in place, the government has laid the regulatory and financial foundation for a major expansion of India’s shipbuilding and maritime industrial ecosystem.
