Shipbuilding Sector Growth: Government Initiatives Drive Expansion

Government Approves 288 Shipbuilding Contracts Worth Rs 19,748 Crore Under SBFAP​

456 Vessels Receive In-Principle Approval as India Pushes Maritime Manufacturing​

New Delhi, March 14: The government has granted in-principle approval to 288 shipbuilding contracts worth Rs 19,748 crore, covering the construction of 456 vessels, under the Shipbuilding Financial Assistance Policy (SBFAP), the government said on Saturday.

Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal said that Rs 620.57 crore in financial assistance has already been disbursed to 23 shipyards for the construction and delivery of 204 vessels under the scheme.

Wide Range of Vessel Types Covered​

The approved projects span a wide variety of vessel categories aimed at strengthening India's maritime infrastructure. These include:

• Tugboats
• General cargo vessels
• Bulk carriers
• Oil tankers
• Crane pontoons
• Heavy deck cargo vessels
• RO RO passenger vessels
• Crew boats
• Deck loading craft
• Coastal research vessels
• Modular pontoons
• Passenger catamarans
• Passenger cum motorcycle ferries
• Passenger ferries
• Landing craft
• Jack up barges
• Self elevating platforms

These vessels are being constructed across multiple Indian shipyards supported by government incentives.

Shipbuilding Development Scheme Approved in 2025​

The government approved the Shipbuilding Development Scheme (SBDS) in September 2025 to further support the domestic shipbuilding sector.

The scheme provides:

• Credit risk coverage for Indian shipyards
• Capital assistance through viability gap funding for brownfield and existing shipyards to expand production capacity

According to the minister, operational guidelines for the scheme have recently been issued, as stated in a written reply to the Lok Sabha.

Sector Assessment Highlights Employment Potential​

A third party assessment conducted in 2024 examined the current status and growth potential of the shipbuilding industry.

The report highlighted that the sector has a high employment multiplier of 6.4, indicating strong potential to generate both direct and indirect employment.

However, the assessment also pointed out several structural challenges affecting industry growth, including:

• Limited domestic demand
• High financing costs
• Capacity constraints
• Technology limitations

Government Launches Multiple Initiatives to Boost Shipbuilding​

To address these challenges and strengthen India's global position in maritime manufacturing, the government has introduced several initiatives, including:

• Shipbuilding Financial Assistance Scheme
• Maritime Development Fund
• Shipbuilding Development Scheme

These programmes are designed to enhance India's global competitiveness in shipbuilding and the broader maritime sector.

Rs 44,700 Crore Push for Shipbuilding Capacity​

The government recently issued operational guidelines for two major shipbuilding initiatives with a total outlay of Rs 44,700 crore.

These initiatives aim to:

• Expand domestic shipbuilding capacity
• Strengthen India's shipbuilding ecosystem
• Improve global competitiveness of Indian shipyards

Financial Assistance up to 25 Percent Per Vessel​

Under the Shipbuilding Financial Assistance Scheme (SBFAS), which has a total corpus of Rs 24,736 crore, the government provides financial assistance ranging from 15 percent to 25 percent per vessel, depending on the category of the vessel.

Over the next 10 years, the scheme is expected to:

• Support shipbuilding projects worth around Rs 96,000 crore
• Stimulate domestic manufacturing
• Generate employment across the maritime value chain

Summary​

The government’s shipbuilding initiatives are aimed at accelerating domestic vessel construction, expanding shipyard capacity, and strengthening India's maritime industry. With financial assistance and new policy support, the programmes are expected to boost investment, create jobs, and improve India's competitiveness in global shipbuilding markets.