India

India Launches Comprehensive Plan to Boost Shipbuilding Industry

By Bhanu Pratap

India is intensifying its efforts to develop a globally competitive shipbuilding sector through an ecosystem-based strategy that combines demand aggregation, shipyard infrastructure, financing support and incentives for domestic ship ownership, former Ministry of Ports, Shipping and Waterways secretary T K Ramachandran said on Thursday at the Sagarmanthan: The Great Oceans Dialogue 2026 in New Delhi. Ramachandran noted that a series of legislative reforms and a ₹70,000‑crore package announced the previous year marked a turning point for the maritime sector. He referred to the enactment of five laws and the government’s financial support package designed to strengthen the industry over a 10‑year period. The strategy aims to address challenges on both the demand and supply sides that had previously limited Indian shipyards’ capacity expansion and order attraction. “We followed an ecosystem approach where we looked at both the demand side and the supply side,” he said, adding that India ranked around 16th globally in shipbuilding at the time of the discussion. One key measure is demand aggregation, which seeks to provide shipyards with predictable orders and greater long‑term visibility. The government identified demand for more than 100 vessels over the following two years. Ramachandran said the government also focused on narrowing the cost gap between building ships in India and procuring them overseas, and on strengthening ship ownership and financing. The Maritime Development Fund provides equity support to businesses across the maritime sector, including shipping, ports and waterways. An interest incentive scheme offers interest subvention of up to 3 %. Another significant measure was granting infrastructure status to shipping, allowing companies to access longer loan tenures and lower borrowing costs. “Earlier, since shipping was not infrastructure, your tenures were just about five or six or seven years. But now you can go up to 25 years,” Ramachandran said. The financing changes are intended to improve the viability of capital‑intensive shipbuilding projects and encourage greater private investment. The strategy also accounts for the replacement of ageing vessels, growing demand for green shipping technologies and opportunities arising from ship recycling. He pointed to incentives under which 40 % of the value of a ship recycled in India can be claimed as a credit, subject to conditions, when the ship is built domestically. The measures are beginning to attract interest from major international companies, including Mediterranean Shipping Company (MSC), which has placed shipbuilding orders in India. Ramachandran also highlighted the establishment of a technology centre to support research and development, design and testing, areas he described as important to developing domestic shipbuilding capabilities. The combination of policy reforms, financial incentives, infrastructure development and rising demand has generated greater interest in India’s maritime industry. He argued that the sector’s prospects extend beyond green vessels, with replacement demand, ship recycling and the development of domestic manufacturing capabilities providing additional opportunities for growth. “If at all, if there is a good time to enter into the maritime industry in India, it is now,” he said.