Cabinet clears ₹69,725-cr shipbuilding package; 30 lakh jobs, ₹4.5 lakh crore investments expected

In a major push to strengthen India’s maritime economy, the Union Cabinet on Wednesday approved a comprehensive ₹69,725 crore package to revitalise the country’s shipbuilding and allied sectors.

“We have made a commitment, and a major part of it is shipbuilding and the maritime sector. Today, a package of...₹69,725 crore has been approved. This is a 10-year program,” Union Minister Ashwini Vaishnaw said at the cabinet briefing.

The decision aims to expand domestic shipbuilding capacity, attract large-scale investments and generate employment while reinforcing India’s strategic self-reliance in the maritime domain, according to an official readout.

Vaishnaw described that the overall strategy is based on four pillars: Shipbuilding Financial Assistance Scheme; Maritime Development Fund; Shipbuilding Development Scheme; and Legal, Policy, and Process Reforms.

Under the plan, the Shipbuilding Financial Assistance Scheme (SBFAS) has been extended till March 31, 2036, with a total corpus of ₹24,736 crore, including a ₹4,001 crore Shipbreaking Credit Note to incentivise recycling of old vessels.

A National Shipbuilding Mission will oversee the implementation of these initiatives.

The Cabinet also approved the creation of a Maritime Development Fund (MDF) with a corpus of ₹25,000 crore, which includes a ₹20,000 crore Maritime Investment Fund and a ₹5,000 crore Interest Incentivisation Fund to reduce borrowing costs and improve project viability.

A Shipbuilding Development Scheme (SbDS) with an outlay of ₹19,989 crore has been cleared to raise India’s shipbuilding capacity to 4.5 million gross tonnage annually.

The scheme will support the development of mega shipbuilding clusters, infrastructure expansion, and the establishment of an India Ship Technology Centre under the Indian Maritime University. It will also provide risk coverage and insurance support for shipbuilding projects.

"Shipbuilding is the mother of heavy engineering. It is extremely important because starting shipbuilding also drives many other industries. It has multiple multiplier effects. When shipbuilding starts, it stimulates engine manufacturing, procurement of various materials, and the development of new materials," Vaishnaw said.

According to government estimates, the measures are expected to generate nearly 30 lakh jobs, attract ₹4.5 lakh crore in investments, and create 4.5 million gross tonnage of shipbuilding capacity.

India’s maritime sector handles about 95% of the country’s trade by volume and 70% by value.