**Summary:**
This document summarizes the Indian Ministry of Ports, Shipping and Waterways' response to Lok Sabha Unstarred Question No. 2103, answered on August 1, 2025, regarding risk insurance cover in shipbuilding finance. The question addresses the absence of state-backed risk insurance for banks and financial institutions involved in shipbuilding finance in India, a practice common in major shipbuilding nations.
The Minister acknowledges that state-backed risk insurance is provided in several leading shipbuilding nations. While such a policy is under consideration, it has not yet been approved in India. The inquiry also explores whether the absence of such mechanisms in India has affected banks' willingness to provide credit or resulted in higher interest rates for shipbuilding projects, and whether the government has assessed the feasibility of introducing a similar risk insurance scheme to protect lenders and reduce capital costs. The response further considers the potential impact of such a mechanism on the competitiveness of Indian shipyards and the overall cost of shipbuilding finance. Finally, the question asks about steps taken by the government to improve access to and affordability of shipbuilding finance in India. The Minister confirms that these points are under consideration.
Key Entities Referenced
Ministry of Ports, Shipping and Waterways: A ministry in the Government of India responsible for ports, shipping, and waterways.
SHRI G M HARISH BALAYOGI: Member of Parliament who raised the question in Lok Sabha.
Lok Sabha: The lower house of the Parliament of India.
SHRI SARBANANDA SONOWAL: Minister of Ports, Shipping and Waterways.
shipbuilding finance: Financial support and mechanisms related to shipbuilding projects.
risk insurance: Insurance coverage against financial risks, especially in shipbuilding.
Indian shipyards: Shipbuilding facilities located in India
India: The country to which the policy and the entities mentioned belong.
GOVERNMENT OF INDIA
MINISTRY OF PORTS, SHIPPING AND WATERWAYS
LOK SABHA
UNSTARRED QUESTION NO. 2103
ANSWERED ON 01.08.2025
RISK INSURANCE COVER IN SHIPBUILDING FINANCE
2103. SHRI G M HARISH BALAYOGI :
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 is aware that in several major shipbuilding nations, banks and
financial institutions are provided with state-backed risk insurance cover through national
agencies to mitigate financial risks in shipbuilding finance, if so, the details thereof;
(b) whether the absence of such risk mitigation mechanisms in the country has affected the
willingness of banks to extend credit for shipbuilding projects or resulted in higher interest
rates, if so, the details thereof;
(c) whether the Government has assessed the feasibility of introducing a similar risk
insurance scheme in the country to protect lenders and reduce the cost of capital for the
shipbuilding sector;
(d) if so, the details thereof and timeline by which the said scheme is expected to be
implemented;
(e) the impact of such a mechanism on the competitiveness of Indian shipyards and the
overall cost of shipbuilding finance; and
(f) the steps undertaken by the Government to make shipbuilding finance more accessible
and affordable in the country?
ANSWER
MINISTER OF PORTS, SHIPPING AND WATERWAYS
(SHRI SARBANANDA SONOWAL)
(a) to (f) Yes Sir, in several major shipbuilding nations, leading state-backed financial
institutions provide risk insurance for the shipbuilding sector. In India, such a policy is yet
to be approved.
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