Cos keen to invest ₹15K cr in greenfield shipbuilding clusters: Sonowal

Several existing Indian shipyards on both the east and west coasts have come forward to seek assistance under the brownfield capacity expansion program, says Sonowal

The Union Cabinet on Wednesday passed what the government called the “biggest maritime reform since independence”, approving a ₹69,725 crore support package to build indigenous shipbuilding capabilities in India. The shipping ministry hopes to attract big local and global shipyards to set up three mega shipbuilding clusters, which will help in the goal of delivering 2,500 new vessels, and it has received investment commitments of up to ₹15,000 crore from major players, Shipping Minister Sarbananda Sonowal tells Dhruvaksh Saha in an email interview. Edited excerpts: 

What is the government’s vision behind the ₹70,000 crore programme? 

The Shipbuilding Financial Assistance Scheme will account for capacity, clusters, risk cover, and research & development (R&D). Apart from shipbuilding, it will give assistance in recycling. And the Maritime Development Fund and Maritime Investment Fund will undertake primarily equity investment in priority maritime projects. The investment fund will extend support to shipyards located in India by reducing the effective cost of capital for borrowers through interest incentivisation mechanisms. Together, these address historic cost disadvantages, financing bottlenecks, and fragmented capacity, enabling India to carry more of its cargo, attract global builders, and generate millions of high-quality jobs. 

Which domestic private players have made commitments for shipbuilding clusters? 

We have received positive responses from a number of shipbuilding companies, steel companies, and heavy-engineering companies to invest in upcoming greenfield clusters. The companies are keen to invest ₹1,000 crore-₹15,000 crore to develop infrastructure and build capacity. Our ministry is working on the modalities. 

By when will these shipbuilding clusters be delivered? 

By the end of this financial year, special purpose vehicles will be constituted, land parcels will be identified, and common maritime assets such as breakwaters, basins and reclamation works may be awarded. In the next two financial years, brownfield expansion will start delivering early capacity while the groundwork for the first greenfield clusters will be completed. By 2028-30, the first berths and production facilities will become operational. From 2030 onwards, these clusters will scale up into fully integrated maritime ecosystems with colocated suppliers, R&D centres, and repair yards. 

Have talks with global players moved forward for investment in greenfield clusters? 

We have been engaging with global majors in Japan and South Korea and they have shown an interest in investing and becoming active players in the development of these greenfield clusters. They are also keen to enter into joint ventures with companies here. The discussions are at an advanced stage. 

Which shipbuilders are looking to get benefits under the brownfield shipyard expansion programme? 

Several Indian shipyards on both the east and west coasts have come forward to seek assistance under the brownfield capacity-expansion programme. These proposals include dry dock expansion, outfitting yard upgrades, and advanced block fabrication facilities.

Have any private players expressed an interest in being a part of the Maritime Development Fund? 

Many domestic financial institutions and global maritime investors have shown interest in co-investing in the fund. Unique features like first-loss cover, benchmark returns, and blended-finance framework have generated interest.  Formal announcements will be made after approvals are complete.