Govt's Rs 44,700-Crore Shipbuilding Push: How Will It Benefit Cochin Shipyard, GRSE, Mazagon Dock?
As the two schemes aim to boost the domestic maritime industry, leading shipbuilding companies are likely to benefit from sustainable capacity building and a boost in manufacturing infrastructure.
The Ministry of Ports, Shipping and Waterways (MoPSW) has notified operational guidelines for two major shipbuilding initiatives with a total outlay of Rs 44,700 crore.
With the move, the Centre is focusing on boosting shipbuilding capacity and enhancing global competitiveness for the industry.
The two schemes are the Shipbuilding Financial Assistance Scheme (SBFAS) and the Shipbuilding Development Scheme (SbDS).
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“Prime Minister Narendra Modi ji’s leadership has given India’s shipbuilding sector a decisive policy reset. These guidelines create a stable and transparent framework that will revive domestic shipbuilding, boosting forward and backward linkage amping ‘Make in India’ initiative, enable large-scale investment and build world-class capacity, positioning India as a major maritime nation on the path to Viksit Bharat and Aatmanirbhar Bharat,” Union Minister of Ports, Shipping & Waterways (MoPSW), Sarbananda Sonowal said in a statement on Saturday, Dec. 27.
Leading players in the domestic shipbuilding industry, such as Mazagon Dock, Garden Reach Shipbuilders and Engineers, and Cochin Shipyard, are expected to gain significantly from the government’s initiative. As the two schemes aim to boost the domestic maritime industry, shipbuilding companies are likely to benefit from sustainable capacity building and a boost in manufacturing infrastructure.
How Will Cochin Shipyard, GRSE, Mazagon Dock Benefit?
The government has notified key provisions of the SBFAS, under which it will spend around Rs 24,736 crore to support the construction of ships in India. Under this scheme, financial assistance ranging between 15% and 25% will be provided per vessel, depending on the category.
“The scheme introduces graded support for small normal, large normal and specialised vessels, with stage-wise disbursement linked to defined milestones and backed by security instruments. Incentives for series orders are also included,” according to the official statement issued by the Ministry of Ports, Shipping and Waterways.
The scheme provides for a National Shipbuilding Mission to ensure coordinated planning and execution of shipbuilding initiatives. It also introduces a Shipbreaking Credit Note, offering ship owners 40% of scrap value for vessels recycled at Indian yards.
For this, the scheme comprises features such as mandatory independent valuation and milestone-based assessments. Over the next decade, SBFAS is expected to support projects worth Rs 96,000 crore, boosting domestic manufacturing and promoting employment in the industry.
On the other hand, the SbDS scheme will focus on building long-term capacity enhancement in India’s shipbuilding sector. It will support the development of greenfield shipbuilding clusters, the modernisation and expansion of existing brownfield shipyards. The scheme also proposes the establishment of an India Ship Technology Centre at the Indian Maritime University for research, design, innovation and skill development.
Greenfield clusters will receive 100% capital support for common infrastructure through a 50:50 Centre–State special purpose vehicle, while existing shipyards will get 25% assistance for brownfield expansion. For smooth execution, funds will be released based on milestones and independently monitored, according to the government statement.
“With the creation of modern infrastructure and a skilled workforce, India’s commercial shipbuilding capacity is projected to rise to about 4.5 million gross tonnage per annum by 2047,” the official statement added.
