In a major push to position Gujarat as a leading shipbuilding hub, the state government has announced a new Shipbuilding and Repair Policy offering a top-up incentive of up to ₹50 crore for the construction of small, large and specialised vessels, over and above the financial assistance provided by the Central government.
The incentive will be available to both existing and proposed shipyards in Gujarat, including major facilities such as Swan Defence and Heavy Industries Ltd (SDHI), which operates the country’s largest shipyard by drydock capacity.
Under the policy, shipyards located in Gujarat will be eligible for a top-up incentive of 8 per cent of the vessel cost or ₹50 crore, whichever is lower, for small and large vessels. For specialised vessels, the state will provide 10 per cent of the vessel cost or ₹50 crore, whichever is lower.
The move is aimed at reducing the cost disadvantage faced by Indian shipbuilders when competing against established global shipbuilding nations such as China, South Korea and Japan.
The policy complements the Centre’s revamped Shipbuilding Financial Assistance Scheme, for which the Union government has earmarked ₹20,416 crore. The scheme is designed to support the construction of small, large and specialised vessels and will remain operational until March 2036, with in-principle approval extending support measures through 2047.
Central Assistance Structure
Under the Central scheme:
Normal vessels costing up to ₹100 crore will receive financial assistance of up to 15 per cent of the actual vessel value.
For normal vessels costing more than ₹100 crore, assistance will be calculated at 15 per cent on the first ₹100 crore and 20 per cent on the remaining value.
Specialised vessels will receive 15 per cent assistance on the first ₹100 crore and 25 per cent on the balance cost.
To improve cash flow management for shipyards, financial assistance will be disbursed in three stages:
30 per cent at keel laying (against security),
40 per cent at launching (against security), and
30 per cent upon vessel delivery, after which the security will be released.
Wide Range of Specialised Vessels Covered
The policy adopts the Central government’s list of specialised vessels eligible for financial assistance. These include LNG, LPG and ammonia carriers; very large crude carriers (VLCCs); very large gas carriers (VLGCs); Suezmax and Aframax tankers; chemical tankers; offshore drilling and production platforms; FPSOs, FSOs and FSRUs; MODU rigs; polar-class exploration vessels; self-propelled dredgers; wind turbine installation vessels; cable-laying vessels; ocean research vessels; large passenger vessels; container ships of 8,000 TEUs or more; and next-generation green and hybrid vessels powered by fuels such as methanol, ammonia, LNG, LPG, hydrogen fuel cells and battery-electric systems.
According to the Gujarat government, the policy will initially remain in force for five years and may be extended for an additional five-year period based on industry response and investment outcomes.
Industry stakeholders believe the combined support from the Centre and the state could significantly strengthen Gujarat’s position in the global shipbuilding market, attract fresh investments, generate employment and accelerate the development of advanced shipbuilding capabilities in India.