- Cabinet likely to approve shipbuilding policy package on 24 September
- Package includes revamped scheme with Rs 25,000 crore Maritime Development Fund
- Fund linked to minimum 40% local content in ship construction
The Cabinet is likely to clear a big policy package for the shipbuilding industry on Wednesday, Sept. 24, sources told NDTV Profit. The package includes a revamped financial assistance scheme, including the Maritime Development Fund with a corpus worth Rs 25,000 crore, to promote the shipbuilding industry.
Sources added that the maritime funds will be linked to a minimum 40% local content in ship construction. The policy is aimed at spurring investments in India's shipbuilding ecosystem. Notably, India faces a 25-35% cost disadvantage compared to Japan, Vietnam, and other markets.
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Maritime Development Fund
While presenting Union Budget 2025, Finance Minister Nirmala Sitharaman on Feb. 1, 2025, Maritime Development Fund with a corpus of Rs 25,000 crore will be set up for long-term financing for the maritime industry.
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FM Sitharaman said the amount will be used to support and promote competition. This will have up to 49% contribution by the government, while the balance will be mobilised from ports and the private sector.
By 2030, Maritime Development Fund (MDF) is aiming at generating up to Rs 1.5 lakh crore investment in the shipping sector. She had also announced continuation of customs duty exemption on inputs and components used for manufacturing of ships for another 10 years.
The announcements assume significance as the country is looking to promote domestic shipbuilding to boost international trade. Sitharaman had also said the Shipbuilding Financial Assistance Policy will be revamped to address cost disadvantages.
'Shipbuilding clusters will be facilitated to increase the range, categories and capacity of ships,' she had said earlier this year, adding that this will include additional infrastructure facilities, skilling and technology to develop the entire ecosystem.
Pointing out that presently the tonnage tax scheme is available to only sea going ships, the minister said the benefits of existing tonnage tax scheme are proposed to be extended to inland vessels registered under the Indian Vessels Act, 2021 to promote inland water transport in the country.
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