Union Budget 2025: Sitharaman announces Maritime Development Fund of ₹25,000 crore for long-term financing

Finance Minister Nirmala Sitharaman on Saturday said a Maritime Development Fund with a corpus of ₹25,000 crore will be set up for long-term financing for the maritime industry.

Presenting the Budget for 2025-26, Sitharaman said the amount will be used to support and promote competition. This will have up to 49% contribution by the government, while the balance will be mobilised from ports and the private sector.

By 2030, the Maritime Development Fund (MDF) is aiming at generating up to ₹1.5 lakh crore investment in the shipping sector.

She also announced the continuation of customs duty exemption on inputs and components used for manufacturing of ships for another 10 years.

The announcements assume significance as the country is looking to promote domestic shipbuilding to boost international trade.

Sitharaman also said the Shipbuilding Financial Assistance Policy will be revamped to address cost disadvantages.

This will also include credit notes for shipbreaking in Indian yards to promote the circular economy, she added.

The minister also said large ships above a specified size will be included in the infrastructure harmonised master list (HML).

"Shipbuilding clusters will be facilitated to increase the range, categories and capacity of ships," she said, adding that this will include additional infrastructure facilities, skilling and technology to develop the entire ecosystem.

Pointing out that presently the tonnage tax scheme is available to only sea-going ships, the minister said the benefits of the existing tonnage tax scheme are proposed to be extended to inland vessels registered under the Indian Vessels Act, 2021 to promote inland water transport in the country.

Ports, Shipping and Waterways Minister Sarbananda Sonowal welcomed the Budget and termed it a progressive policy statement towards realising the vision of Prime Minister Narendra Modi of a Viksit Bharat by 2047.

The Union Budget has also extended the Shipbuilding Financial Assistance Policy (SBFAP) 2.0, aimed at providing direct financial subsidies to Indian shipyards. This initiative seeks to help in securing orders by offsetting operational cost disadvantages, thereby strengthening the domestic shipbuilding industry. To be financed via Budgetary support, the total outlay of the scheme is ₹18,090 crore.

Another innovative scheme announced in the Budget is the Shipbreaking Credit note. This scheme incentivises Ship Scrapping by issuing a Credit Note of 40% of the scrap value which can be reimbursed to buy new Made in India ships.