India has notified operational guidelines for two shipbuilding initiatives—the Shipbuilding Financial Assistance Scheme and the Shipbuilding Development Scheme—aimed at expanding domestic shipbuilding capacity and improving global competitiveness. The combined budgetary outlay for the two schemes stands at INR 447 billion, with validity until 31 March 2036 and an in-principle extension envisaged up to 2047.
In an official statement, the Ministry of Ports, Shipping and Waterways said the guidelines establish a transparent and accountable framework for implementation, including milestone-based disbursement, independent evaluation and security-backed financial support. The measures are intended to strengthen domestic shipbuilding, stimulate investment and enhance manufacturing linkages across the maritime value chain.
Under the Shipbuilding Financial Assistance Scheme, the government has allocated INR 247.36 billion to provide financial assistance ranging from 15 percent to 25 percent of the contract value per vessel, depending on vessel category. The scheme introduces graded support for small normal, large normal and specialised vessels, with disbursement linked to defined construction milestones. Incentives for series orders have also been incorporated.
The guidelines provide for the establishment of a National Shipbuilding Mission to coordinate planning and execution of shipbuilding initiatives. They also introduce a Shipbreaking Credit Note mechanism, under which ship owners scrapping vessels at Indian yards will receive a credit equivalent to 40 percent of the scrap value, linking ship recycling with new ship construction. Independent valuation and milestone-based assessments have been made mandatory to strengthen governance and ensure efficient use of public funds.
According to the ministry, the financial assistance scheme is expected to support shipbuilding projects worth around INR 960 billion over the next decade, with spillover effects for domestic manufacturing and employment generation across the maritime ecosystem.
The Shipbuilding Development Scheme carries a budgetary outlay of INR 199.89 billion and focuses on long-term capacity and capability creation. The scheme provides for the development of greenfield shipbuilding clusters, expansion and modernisation of existing brownfield shipyards, and the establishment of an India Ship Technology Centre under the Indian Maritime University to support research, design, innovation and skills development.
Under the development scheme, greenfield shipbuilding clusters will receive 100 percent capital support for common maritime and internal infrastructure through a 50:50 Centre–State special purpose vehicle. Existing shipyards will be eligible for 25 percent capital assistance for brownfield expansion of critical infrastructure such as dry docks, shiplifts, fabrication facilities and automation systems. Disbursements will be milestone-based and monitored by independent evaluation agencies.
The scheme also includes a Credit Risk Coverage Framework offering government-backed insurance for pre-shipment, post-shipment and vendor-default risks to improve project bankability and financial resilience.
With the creation of modern infrastructure and a skilled workforce, the ministry projects India’s commercial shipbuilding capacity to rise to about 4.5 million gross tonnage per annum by 2047. The operational guidelines have been published on the ministry’s official website to enable structured and transparent implementation.