In a major push to develop India’s maritime capabilities and transform the country into a global shipbuilding hub, Finance Minister Nirmala Sitharaman announced several transformative initiatives in the 2025 budget. Among the most significant is the creation of a ₹25,000 crore ($2.9 billion) Maritime Development Fund, aimed at the long-term financing of India’s shipbuilding and repair sectors.

Key Highlights:

  1. Maritime Development Fund: The government will contribute 49% to the ₹25,000 crore fund, with the remaining resources mobilized from ports and the private sector. This substantial investment aims to modernize and expand India’s shipbuilding capacity to meet growing trade demands, especially as the nation ramps up its infrastructure development to become a manufacturing powerhouse by 2047.
  2. Promotion of Shipbuilding Clusters: The government is committed to developing dedicated shipbuilding clusters that will enhance the range, capacity, and categories of ships produced in India. These clusters will be equipped with state-of-the-art infrastructure, technology, and skilling initiatives to support the entire ecosystem of shipbuilding.
  3. Financial Assistance for Shipbuilding: The government is restarting the Shipbuilding Financial Assistance Scheme to support domestic shipbuilders. This initiative aims to bolster India’s position in the global maritime industry by providing the necessary financial backing to compete on an international scale.
  4. Incentives for Ship Breaking: To stimulate the scrapping of old vessels and promote the construction of newer, more efficient ships, India will issue credit notes for shipbreaking activities in Indian yards. Additionally, the government will extend the import tax exemption on materials needed for shipbuilding and shipbreaking by an additional 10 years.
  5. Domestic Manufacturing to Join Global Supply Chains: The government has outlined strategies to support domestic manufacturers in integrating into global supply chains, ensuring that India becomes a crucial player in international trade and logistics.

Strategic Vision for the Future:

India’s shipping fleet has struggled to keep pace with its burgeoning trade demands. With an eye on reducing reliance on foreign carriers and improving India’s maritime infrastructure, the government plans to set up a new national shipping company. This new initiative, involving oil refiners and the Shipping Corporation of India, aims to expand the country’s fleet and reduce the freight costs paid to foreign carriers.

As India strives to achieve its vision of becoming a developed nation by 2047, these ambitious maritime initiatives mark a significant step in enhancing the country’s role in global trade, reducing logistical costs, and creating jobs in the shipbuilding sector.