Executive Summary:
The Indian government acknowledges the country's limited presence in global shipbuilding and repair and aims to revitalize the industry, attract private investment, and cultivate skilled manpower to establish India as a competitive maritime hub by 2030, in line with Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047. The Union Budget Speech 2025 included measures like revamping the Shipbuilding Financial Assistance Policy, including large ships in the infrastructure harmonized master list, and creating shipbuilding clusters. A Maritime Development Fund with a corpus of INR 25,000 crore will be set up for long-term financing.
Key Points / Main Content:
* **Union Budget 2025 Announcements:**
* Revamp the Shipbuilding Financial Assistance Policy (SBFA) to address cost disadvantages, including credit notes for shipbreaking in Indian yards.
* Include large ships in the infrastructure harmonized master list (HML).
* Facilitate shipbuilding clusters to increase ship range, categories, and capacity, including additional infrastructure, skilling, and technology.
* Establish a Maritime Development Fund with a corpus of INR 25,000 crore, with up to 49% government contribution.
* Continue the exemption of Basic Customs Duty (BCD) on raw materials, components, consumables, or parts for ship manufacture and ship breaking for another ten years.
* **Government Measures to Promote Shipbuilding:**
* Provide Shipbuilding Financial Assistance (SBFA) to Indian shipyards for contracts signed between April 1, 2016, and March 31, 2026.
* Grant infrastructure status to shipbuilding yards.
* Issue guidelines for tenders, granting qualified Indian Shipyards the Right of First Refusal (ROFR).
* Advise government entities to ensure local content as per the Public Procurement Preference to Make in India order 2017, requiring procurement of ships less than Rs 200 crore from Indian shipyards.
* Release Standard Tug Designs for use by Major Ports for procurement of tugs to be built in Indian Shipyards.
* **Cochin Shipyard Limited (CSL) Initiatives:**
* Commissioned a New Dry Dock (NDD) at its Kochi facility, costing approximately Rs 1,800 crore.
* Developed a state-of-the-art International Ship Repair Facility (ISRF) at Kochi at an estimated cost of Rs.970 crores.
* **Internship Programs:**
* Cochin Shipyard Limited (CSL) and Mazagon Dock Shipbuilders Limited (MDL) have registered under the Prime Minister Internship Scheme (PMIS).
Impact Analysis:
Shipbuilding Industry:
* Impact: Enhanced financial assistance, infrastructure status, and preference in government tenders aim to boost competitiveness and attract investment. Continued BCD exemption lowers manufacturing costs.
* Action Required: Shipyards should leverage financial assistance programs, infrastructure status benefits, and ROFR opportunities to expand operations and secure contracts.
Government Departments/Agencies & Public Sector Undertakings:
* Impact: Required to prioritize local content in ship procurement and follow guidelines for tendering processes, potentially affecting vessel acquisition costs and timelines.
* Action Required: Align procurement processes with the "Make in India" order, utilize standard tug designs, and participate in the Maritime Development Fund.
Ports:
* Impact: Will benefit from the availability of locally built tugs based on standard designs and improved infrastructure for ship repair and handling larger vessels.
* Action Required: Procure tugs based on released standard designs from Indian shipyards and prepare for handling larger vessels with the new infrastructure.
Skilled Manpower:
* Impact: Increased opportunities for internships and skill development programs, leading to enhanced employability in the maritime sector.
* Action Required: Participate in internship programs offered by CSL and MDL to gain practical experience in shipbuilding.
Investors:
* Impact: The Maritime Development Fund and other incentives may attract private investment in the shipbuilding and maritime sectors.
* Action Required: Explore investment opportunities in shipbuilding clusters, the Maritime Development Fund, and related projects.
Key Entities Referenced
Maritime India Vision 2030: A government initiative with objectives related to reviving the shipbuilding industry and attracting private sector investment.
Maritime Amrit Kaal vision 2047: A government initiative with objectives related to reviving the shipbuilding industry and attracting private sector investment.
Shipbuilding Financial Assistance Policy: A policy to be revamped to address cost disadvantages in the shipbuilding industry.
Shipbuilding Clusters: Clusters to be facilitated to increase the range, categories and capacity of ships.
Maritime Development Fund: A fund with a corpus of INR 25,000 crore to be set up for long-term financing for the maritime industry.
Cochin Shipyard Limited (CSL): A public sector enterprise under Ministry of Port, Shipping Waterways MoPSW that has undertaken several initiatives for shipbuilding and ship repair.
Mazagon Dock Shipbuilders Limited (MDL): A public sector shipyard that has registered under the Prime Minister Internship Scheme PMIS to provide internships in the shipbuilding sector.
Kochi, Kerala: Location of Cochin Shipyard Limited (CSL) facilities, including the New Dry Dock (NDD) and International Ship Repair Facility (ISRF).
GOVERNMENT OF INDIA
MINISTRY OF PORTS, SHIPPING AND WATERWAYS
LOK SABHA
STARRED QUESTION NO. *184
ANSWERED ON 01.08.2025
REVIVAL OF SHIPBUILDING INDUSTRY
*184. DR. PRADEEP KUMAR PANIGRAHY:
Will the Minister of PORTS, SHIPPING AND WATERWAYS be pleased to state:
प(cid:517)न, पोत प(cid:303)रवहन एवं जलमाग(cid:330) मं(cid:361)ालय
(a) whether the Government has taken note of India’s low share in global shipbuilding
and ship repair; and
(b) if so, the steps taken by the Government to revive the shipbuilding industry, attract
private investment and develop skilled manpower to position India as a competitive
maritime hub by 2030?
ANSWER
MINISTER OF PORTS SHIPPING AND WATERWAYS
(SHRI SARBANANDA SONOWAL)
(a) to (b) A statement is laid on the Table of the House.
1STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (b) OF THE LOK SABHA
STARRED QUESTION NO. *184 FOR 1st AUGUST, 2025 RAISED BY DR. PRADEEP
KUMAR PANIGRAHY REGARDING “REVIVAL OF SHIPBUILDING INDUSTRY”
(a) to (b) Yes. Reviving the shipbuilding industry and attracting private sector investment
in shipbuilding are in line with the objectives of Maritime India Vision 2030 and Maritime
Amrit Kaal vision 2047.
The Union budget speech, 2025 mentions the following, with respect to
shipbuilding:
Para 63: “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.”
Para 64: “Large ships above a specified size will be included in the infrastructure
harmonized master list (HML).”
Para 65: “Shipbuilding Clusters will be facilitated to increase the range, categories and
capacity of ships. This will include additional infrastructure facilities, skilling and
technology to develop the entire ecosystem.”
Para 66: “For long-term financing for the maritime industry, a Maritime Development Fund
with a corpus of INR 25,000 crore will be set up. This will be for distributed support and
promoting competition. This will have up to 49 per cent contribution by the Government,
and the balance will be mobilized from ports and private sector”
Para 125: “Considering that shipbuilding has a long gestation period, I propose to
continue the exemption of BCD on raw materials, components, consumables or parts for
the manufacture of ships for another ten years. I also propose the same dispensation for
ship breaking to make it more competitive”.
The Government has taken the following measures to promote the shipbuilding activities:
i. Government is providing Ship building financial assistance (SBFA), to Indian
shipyards to provide them a level playing field vis-à-vis Foreign Shipyards.
Shipyards receive financial assistance for shipbuilding contracts signed during the
dates, April 1, 2016 to March 31, 2026 including the said dates.
ii. The government has granted infrastructure status to the shipbuilding yards. This
status helps the shipyards to pick up debt at favorable terms and lower interest
rates. They will also be able to issue infrastructure bonds.
iii. Government has issued guidelines for evaluating and awarding tenders for new
shipbuilding orders floated by government departments or agencies including public
2sector undertakings for acquisition of any type of vessel(s). Whenever acquisition
of a vessel(s) is undertaken through tendering route, the qualified Indian Shipyards
will have a “Right of first refusal” (ROFR) to enable them to match the evaluated
lowest price offered by the foreign shipyard.
iv. To increase ship-building activities in Indian shipyards, the Government entities
dealing with ship building and ship-owning are advised to ensure local content as
per the Government of India Public Procurement (Preference to Make in India)
order 2017. As per this order, procurement of Ships of less than Rs 200 crore is
required to be from Indian shipyards.
v. The government has released Standard Tug Designs of five variants for use by
Major ports for procurement of tugs to be built in Indian Shipyards.
vi. Cochin Shipyard Limited (CSL), a public sector enterprise under Ministry of Port,
Shipping & Waterways (MoPSW), has also undertaken several initiatives for
shipbuilding and ship repair, they are as follows:
a. For shipbuilding, CSL has commissioned a New Dry Dock (NDD) in its Kochi
facility. Built at a cost of about Rs 1,800 crores it is a flagship project reflecting
New India's engineering prowess. This one-of-a-kind 310-meter-long stepped
dry dock, with a width of 75/60 meters, depth of 13 meters and a draught of up
to 9.5 meters, is one of the largest marine infrastructures in the region. This is
able to handle strategic assets as well as large commercial vessels, thus
eliminating India's dependency on foreign nations.
b. For ship repairs, CSL has developed a state-of the-art International Ship Repair
Facility (ISRF) at Kochi at an estimated cost of Rs.970 crores. The ISRF aims
to modernize, expand and substantially augment the existing ship repair
capacity of India.
vii. To provide internships in the shipbuilding sector, two of the public sector shipyards
Cochin Shipyard Limited (CSL) and Mazagon Dock Shipbuilders Limited (MDL)
have registered under the Prime Minister Internship Scheme (PMIS).
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