Pic Credit: Pexel
The Indian government has taken a significant step toward strengthening the country’s shipbuilding ecosystem by granting in-principle approval to 288 shipbuilding contracts worth ₹19,748 crore, covering the construction of 456 vessels across multiple categories.
According to Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal, the approvals were granted under the Shipbuilding Financial Assistance Policy (SBFAP), a key initiative designed to encourage domestic shipbuilding and enhance the competitiveness of Indian shipyards.
Financial Support to Shipyards
The government has already disbursed ₹620.57 crore in financial assistance to 23 shipyards that have completed the construction and delivery of 204 vessels under the scheme. The policy provides financial incentives to domestic shipbuilders to offset cost disadvantages and promote large-scale vessel construction within the country.
The vessels covered under the approved contracts span a wide range of maritime applications. These include tugs, general cargo vessels, bulk carriers, oil tankers, crane pontoons, heavy deck cargo vessels, Ro-Ro passenger vessels, crew boats, passenger ferries, landing crafts, and self-elevating platforms. Such diversity reflects the growing demand for both commercial and specialised maritime vessels in India’s coastal and inland shipping sectors.
New Push Through Shipbuilding Development Scheme
To further strengthen the industry, the government approved the Shipbuilding Development Scheme (SBDS) in September 2025. The scheme aims to improve financing access for shipyards and expand their production capacity.
Under the initiative, the government will offer credit risk coverage to Indian shipyards and provide viability gap funding to support the expansion of existing or brownfield shipbuilding facilities. Operational guidelines for the scheme have recently been issued, enabling shipyards to begin applying for support.
Shipbuilding Sector Holds Strong Job Potential
An independent assessment of India’s shipbuilding industry conducted in 2024 highlighted the sector’s strong employment potential. According to the report, shipbuilding has an employment multiplier of 6.4, meaning that every job created in the sector can generate more than six additional jobs across related industries such as steel, engineering, logistics, and maritime services.
This indicates that expanding shipbuilding capacity could significantly contribute to both direct and indirect job creation, particularly in coastal regions where shipyards are located.
Challenges Hindering Growth
Despite its potential, the study also pointed out several structural challenges affecting the growth of the industry. These include limited domestic demand for ships, high financing costs, technological gaps, and capacity constraints within shipyards.
To address these issues and strengthen India’s position in the global shipbuilding market, the government has introduced several policy initiatives. These include the Shipbuilding Financial Assistance Policy, the Maritime Development Fund (MDF), and the Shipbuilding Development Scheme.
₹44,700 Crore Push for Maritime Infrastructure
In a major boost to the maritime sector, the government has also notified operational guidelines for two key shipbuilding initiatives with a combined outlay of ₹44,700 crore. These programmes aim to expand India’s domestic shipbuilding capacity, modernise shipyards, and improve the industry’s global competitiveness.
Under the financial assistance framework, which has a total allocation of ₹24,736 crore, shipbuilders will receive government support ranging from 15% to 25% of the vessel cost, depending on the type and category of ship being constructed.
Long-Term Vision for Indian Shipbuilding
The government expects these initiatives to transform India’s shipbuilding ecosystem over the coming decade by attracting investment, modernising infrastructure, and increasing domestic production capacity.
Strengthening shipbuilding capabilities is also seen as essential for India’s broader maritime ambitions, including expanding coastal shipping, improving port connectivity, and supporting the country’s growing role in global trade.
By encouraging domestic ship construction and supporting shipyards financially, policymakers hope to position India as a more competitive player in the international shipbuilding industry while generating employment and boosting economic activity across the maritime sector.
