NEW DELHI: Prime Minister Narendra Modi has unveiled three initiatives with a combined government investment exceeding ₹70,000 crore aimed at enhancing India’s maritime capabilities, reducing reliance on foreign vessels, and preparing for potential supply chain disruptions. These schemes are part of the government’s broader objective to elevate India to among the top 10 nations worldwide in shipbuilding and ship ownership, while also tripling the share of global port cargo handled by Indian ports.
Currently, India ranks 16th globally in both shipbuilding and ship ownership, with a mere 7% of Indian-owned ships constructed domestically. Historical data underscores a significant decline in the share of export-import (EXIM) cargo transported by Indian vessels, plummeting from 41% in FY1988 to a mere 5% in FY2023.
During his address in Bhavnagar on Saturday, PM Modi noted the financial implications of this dependence, stating that India pays roughly ₹6 lakh crore each year to foreign shipping companies, an amount comparable to the country’s defense budget.
The first initiative, the ₹25,000 crore Shipbuilding Financial Assistance Scheme, will provide financial support to shipbuilders. The second, the ₹25,000 crore Maritime Development Fund, aims to facilitate access to long-term, low-cost financing for industry players. The third initiative, the Shipbuilding Development Scheme (SDS), which amounts to ₹20,000 crore, focuses on capital assistance for developing large shipbuilding mega clusters. This includes infrastructure support for shared maritime facilities and land connectivity, capital grants for existing shipyards to expand capacity, and establishing a governing body for capability enhancement.
Sources indicate that these programs were developed drawing lessons from leading maritime nations such as China and South Korea, which have succeeded in shipbuilding through government-led financial support and cluster-based development strategies.
The initiatives have the potential to create nearly 2 million direct and indirect jobs and are expected to receive Cabinet approval in the coming weeks. Government officials highlight that the SDS is especially important for bolstering the Indian shipbuilding industry by enhancing both capacity and capabilities, including providing credit risk covers, which are available in other countries. Currently, only eight out of 61 shipyards in India are categorized as large or very large.
On May 14, it was reported that the government has earmarked four land parcels between 2,000 and 3,000 acres each in Odisha, Andhra Pradesh, Gujarat, and Tamil Nadu to develop greenfield shipbuilding and repair hubs.
