The government is considering granting infrastructure status to the entire shipping industry, encompassing all types of ships and vessels. While the shipping ministry initially requested this designation only for coastal vessels, the finance ministry is contemplating a broader coverage. This move would open up opportunities for the sector to receive financial support and concessions from banks and institutions like the National Bank for Financing Infrastructure and Development.
Currently, shipbuilding and shipyards have infrastructure status, allowing them to issue infrastructure bonds for operating capital and secure long-term, low-cost project financing. Extending these benefits to the entire sector is expected to bolster the domestic shipping industry. A parliamentary committee had previously recommended granting infrastructure status to all ships and vessels, not just those involved in coastal commerce. It also proposed the establishment of a marine finance program or specialized financing organization to boost the shipbuilding sector.
As part of the Maritime India Vision 2030, the government aims to elevate India’s shipbuilding ranking to the top 10 from its current position at 22. To support domestic shipyards, the Shipbuilding Financial Assistance Policy scheme has been introduced, offering financial assistance for shipbuilding contracts signed between April 1, 2016, and March 31, 2026. The assistance rate will start at 20% in 2016 and gradually decrease to 11% by 2026. Additionally, the government plans to establish shipbuilding hubs in five states, including Maharashtra, Andhra Pradesh, and Gujarat.
