Cabinet clears Rs.69,725 crore package to boost shipbuilding and maritime sector

On September 24, 2025, the Union Cabinet, led by Prime Minister Narendra Modi, greenlit an extensive package totaling Rs.69,725 crore aimed at enhancing shipbuilding, maritime financing, and domestic capabilities in India. This initiative is designed to breathe new life into the country’s maritime sector through a strategic approach built on four key pillars: financing, infrastructure, technical development, and policy reforms.

The package extends the Shipbuilding Financial Assistance Scheme (SBFAS) until March 31, 2036, with a total fund of Rs.24,736 crore. It also rolls out a Shipbreaking Credit Note valued at Rs.4,001 crore to encourage sustainable practices within the industry. A National Shipbuilding Mission will be set up to ensure effective implementation.

Additionally, a Maritime Development Fund (MDF) with a total of Rs.25,000 crore has been approved, which will feature a Maritime Investment Fund of Rs.20,000 crore with 49 percent government participation, alongside an Interest Incentivization Fund of Rs.5,000 crore aimed at reducing borrowing costs.

Moreover, the Shipbuilding Development Scheme (SbDS), with a budget of Rs.19,989 crore, has been sanctioned to boost India’s domestic shipbuilding capacity to 4.5 million Gross Tonnage each year. This scheme will foster the development of large shipbuilding clusters, enhance infrastructure, and support the creation of the India Ship Technology Centre under the Indian Maritime University. It will also offer risk coverage, including insurance support for shipbuilding projects.

The overall package is expected to unlock investments worth Rs.4.5 lakh crore, create nearly 30 lakh jobs, and establish 4.5 million Gross Tonnage of additional capacity.

Key highlights

• This initiative aims to revitalise the sector through financial support, infrastructure development, technical growth, and policy reforms.
• The Shipbuilding Financial Assistance Scheme (SBFAS) will continue until March 2036.
• It will be supported by a total fund of Rs.24,736 crore.
• A new Shipbreaking Credit Note worth Rs.4,001 crore has been introduced.
• A National Shipbuilding Mission will be created to oversee the programme’s execution.
• The government has also cleared a Maritime Development Fund (MDF) worth Rs.25,000 crore.
• This fund will provide long-term financing for maritime infrastructure.
• It includes a Maritime Investment Fund of Rs.20,000 crore.
• A separate Shipbuilding Development Scheme (SbDS) has been approved with a budget of Rs.19,989 crore.
• India’s maritime sector currently handles 95% of the country’s trade by volume. It also manages 70% of trade by value.