In a significant expansion of India’s infrastructure landscape, the Finance Ministry has notified “Large Ships” as a distinct subsector under Transport and Logistics, a move seen as critical to building domestic shipping capacity and reducing dependence on foreign-flagged vessels.
The inclusion, notified on Friday by the Department of Economic Affairs, updates the Harmonized Master List of Infrastructure Sub-sectors for the first time since October 2022.
The decision extends the benefits of infrastructure status that include cheaper financing, viability gap funding, tax incentives and easier credit access, to owners and builders of large commercial vessels .
Defining Large Ships
The notification defines Large Ships as commercial vessels of 10,000 gross tonnage (GT) or more under Indian ownership and flag, or vessels of 1,500 gross tonnage and above that are built in India and registered under the Indian flag.
The sharper criteria ensure that the policy support directly strengthens Indian shipbuilding yards and incentivises vessel owners to register under the national flag.
Strategic Significance
Shipping carries over 90 per cent of India’s external trade by volume, yet a bulk of it moves on foreign-flagged vessels. Industry experts say the government’s move is aimed at correcting this imbalance by making domestic shipping commercially attractive.
The shift comes at a time when global shipping routes are being redrawn due to geopolitical tensions, energy security concerns and climate-linked disruptions.
By bolstering India’s fleet strength, the Centre is looking to secure trade flows, reduce freight outgo and build resilience into supply chains.
Broader Infrastructure Net
The updated Harmonized List now spans five broad categories. It includes, Transport & Logistics, Energy, Water & Sanitation, Communication, and Social & Commercial Infrastructure.
Alongside roads, ports, railways, power projects, telecom networks, hospitals, data centres and affordable housing, large ships will now qualify for the same policy benefits.
Industry Implications
For India’s shipyards, which have long struggled with high costs and lack of scale, the announcement could be a turning point. Infrastructure status makes projects eligible for priority sector lending, lower interest rates, and extended repayment timelines — crucial factors for capital-heavy shipbuilding.
Shipping companies, meanwhile, stand to gain from easier access to institutional finance, helping them expand fleets and compete globally.
While the policy is expected to boost investor confidence, experts caution that its success will hinge on execution — ensuring that financing actually flows to shipbuilders and operators, and that regulatory bottlenecks are eased.
By formally bringing large ships into the infrastructure fold, the government has signalled its intent to anchor maritime power at the heart of India’s economic strategy.
