Maritime ambitions: New policy can increase capacity substantially

The Union Cabinet’s approval of a ₹69,725 crore package for the shipbuilding and maritime sector will boost India’s capabilities. Structured around four pillars, including strengthening domestic maritime capacity, enabling long-term financing, developing shipyards, and building human capital, the package is ambitious in scope. It also aligns with broader national goals of energy efficiency and sustainable growth. Nearly 95 per cent of India’s foreign trade by volumes passes through maritime routes. Its geography also offers an advantage. Straddling major global shipping lanes in the Indian Ocean, India can serve as a hub for trade, logistics, and vessel maintenance. Yet India’s shipbuilding industry has long lagged behind global leaders such as China, South Korea, and Japan. This is partly due to fragmented policy support, high financing costs, and under-investment in shipyard infrastructure. 

The new package introduces an integrated approach. The Shipbuilding Financial Assistance Scheme will now be extended until 2036, with a substantial corpus of ₹24,736 crore, alongside a Shipbreaking Credit Note, worth ₹4,001 crore. A National Shipbuilding Mission will steer the overall effort, ensuring continuity and accountability. The issue of long-term finance is expected to be addressed through the creation of a Maritime Development Fund with a corpus of ₹25,000 crore. This includes the Maritime Investment Fund and the Interest Incentivisation Fund, which are designed to improve project bankability and attract private capital. The recent decision to grant large commercial ships infrastructure status is also significant. It will enable owners of ships to access long-term and low-cost financing. 

Another crucial element of the package is the focus on skilling. Modern shipbuilding requires precision engineering, automation, digital-design tools, and adherence to global environmental standards. With International Maritime Organization regulations increasingly mandating energy efficiency and reduced emission, ships must be greener, lighter, and smarter. Skilling India’s workforce to design and build such vessels is essential if it wants to capture future demand. Much of the global fleet is ageing, and environmental norms are tightening. Shipping companies worldwide are seeking vessels that consume less fuel, emit fewer pollutants, and integrate new technologies such as LNG (liquefied natural gas) propulsion, hybrid systems, and digital navigation tools. 

However, challenges remain. For decades, Indian shipyards have struggled with cost overruns, project delays, and inconsistent policy support. The government must therefore ensure that incentives are tied to performance, that shipyards are modernised with clear benchmarks, and that financing channels are transparent and easily accessible. The private sector too must play its part. To succeed, Indian shipyards must aggressively court global orders, form technology partnerships with established international players, and focus on export. The government, for its part, should also look at complementary measures such as reducing logistics bottlenecks at ports. If implemented effectively, the overall package is expected to substantially increase shipbuilding capacity, generate nearly three million jobs, and attract investments of around ₹4.5 trillion. But beyond economics, it will bolster national, energy, and food security, while reinforcing India’s geopolitical resilience in a turbulent world.