Government Plans Rs 5,000 Crore Push to Boost Shipbuilding Sector

New Delhi, Sep 16 (KNN) The Union Finance Ministry is planning a major funding push to strengthen India’s shipbuilding sector, with a proposed budgetary support of Rs 5,000 crore to provide low-interest loans for shipping projects, according to officials aware of the matter.

As part of this plan, the ministry is considering offering a 3 per cent interest subsidy under the proposed Rs 25,000 crore Maritime Development Fund.

This support aims to make borrowing cheaper for companies looking to build ships in India or acquire vessels under the Indian flag, thereby helping them compete globally on financing costs.

The move aligns with the Ministry of Ports, Shipping and Waterways’s plan to attract up to Rs 75,000 crore in investments across three greenfield shipbuilding clusters.

The interest subsidy is expected to encourage more Indian companies to add locally made or Indian-flagged ships to their fleets, providing shipbuilders with assured orders.

India currently spends around USD 75 billion each year leasing foreign ships due to limited domestic manufacturing. The country contributes less than 1 per cent to the global shipbuilding market, which is dominated by China, South Korea, and Japan.

Data from the Directorate General of Shipping shows India has only about 1,550 ships under its flag, representing just 2 per cent of global shipping capacity.

The Maritime Development Fund is expected to receive Cabinet approval soon. It will have a Rs 20,000 crore initial corpus—Rs 9,800 crore from the Centre and Rs 10,200 crore from pension funds, private equity, and major ports.

The fund will offer equity, debt, viability gap funding, and buyer credit to shipbuilding, repair, and related infrastructure projects.

Experts believe this could modernise India’s shipbuilding capabilities, boost port-linked infrastructure, and create maritime-industrial ecosystems, ultimately helping India emerge among the top 10 shipbuilding nations by 2030 and top five by 2047.

(KNN Bureau)