The Union Budget’s revamped Ship Building Financial Assistance Policy and the ₹25,000 crore Maritime Development Fund have cleared the Expenditure Finance Committee (EFC) review, with notes being prepared for Union Cabinet approval. The EFC assesses proposals involving significant budget allocations to ensure financial viability.
Finance Minister Nirmala Sitharaman announced the Maritime Development Fund to support the maritime industry, which will include a government contribution of up to 49%. The fund aims to enhance competitiveness and promote long-term financing. Additionally, the shipbuilding financial assistance scheme will be updated to mitigate cost disadvantages, offering credit notes for shipbreaking to encourage a circular economy.
To boost India’s shipbuilding industry, which currently holds a mere 0.06% of the global market, the government plans to grant infrastructure status to large vessels, facilitating access to low-cost funds. The proposed scheme also includes a ship recycling credit note, allowing fleet owners to receive 40% of a ship’s scrap value, applicable only if they construct new vessels in India.
Under the revised assistance scheme, shipyards will receive increased subsidies based on the type of vessels constructed, with a long-term plan extending through 2035, and potentially to 2047, to provide stability and encourage order bookings.
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