The government is expanding the scope of the recently approved ₹20,416-crore Shipbuilding Financial Assistance Scheme (SBFAS) to accelerate domestic vessel construction and ensure full utilisation of the fund. The scheme will now cover orders secured on nomination from Central and State governments, PSUs and defence vessels meant for export, excluding the cost of weapons.
India plans to build over 350 ships worth nearly ₹2.2 lakh crore under its fleet expansion programme. To support this, the Ministry of Ports, Shipping and Waterways is proposing more flexible guidelines compared to the existing Shipbuilding Financial Assistance Policy (SBFAP), which ends on March 31, 2026.
Shipyards will be permitted to avail benefits from other Central or State schemes in addition to SBFAS—an option not allowed under the current policy. For contracts signed between September 24, 2025, and March 31, 2026, builders may choose between SBFAP and SBFAS. Future favourable amendments to SBFAS will also apply retrospectively to vessels with in-principle approval.
Vessels under construction under SBFAP may additionally benefit from the newly introduced shipbreaking credit note, issued when a vessel is scrapped at a certified, HKC-compliant recycling yard. The credit note will be valued at 40% of the fair scrap value, valid for three years, and can be redeemed up to 5% of the cost of a new vessel.
The ₹20,416-crore scheme, aimed at building large, green and specialised vessels, is expected to support nearly ₹96,000 crore in shipbuilding until 2036, with in-principle approval extending to 2047.
Financial assistance will be capped at 15% for small normal vessels up to ₹100 crore, while larger vessels will receive 15% on the first ₹100 crore and 20% on the remaining cost. Specialised vessels will receive 15% on the first ₹100 crore and 25% thereafter. Payments will be made in three stages—keel laying (30%), launch (40%) and delivery (30%).
Specialised vessels covered include oil and gas carriers, offshore units, dredgers, wind installation vessels, cable layers, large passenger ships, container vessels above 8,000 TEUs, and green-fuel ships such as methanol, ammonia and LNG-powered vessels.
An industry executive said the policy shift marks a major boost for domestic shipyards: “The government is now willing to provide assistance even for nomination-based orders to maximise utilisation of the fund.”
The expanded scheme is expected to significantly strengthen India’s shipbuilding capabilities and enhance competitiveness in the global market.
