Port reforms, increased shipbuilding activity drive credit surge to shipping sector

NEW DELHI : India’s shipping sector has seen a surge in bank credit, with data from the RBI reporting that outstanding credit to the sector stood at ₹9,959 crore as of October 2025, up 28 per cent year-on-year from the ₹7,782 crore in the same period last year.

The outstanding credit in the sector has risen nearly 2x compared to the ₹5,364 crore outstanding as of October 2020.

Speaking to businessline, analysts suggest that the growth of disbursements to the sector has seen an increase due to the steady volume growth at India’s major ports and the scaling up of capex-heavy indigenous shipbuilding capabilities.

Bhavik Vora, Partner and Transportation & Logistics Industry Leader, Grant Thornton Bharat, says that the creditworthiness has been supported by improvements in port capabilities.

“Sustained capex by existing ports and capacity addition through new integrated port-led logistics projects has materially strengthened the operating environment for shipping. Major ports have recorded year-on-year growth of around 7-8 per cent in cargo handled through April-November 2025, and core segments such as crude, containerised freight and bulk commodities have translated into more predictable revenues and cash flows, leading to improved credit assessment by lenders,” he said.

Consequently, the ports industry has seen a 30 per cent y-o-y jump in outstanding loans to ₹7,588 crore in October 2025 from ₹5,823 crore in the same month last year – the highest within the infrastructure industries.

Prashant Vashisht, Senior Vice President & Co-Group Head, ICRA Ltd, argues that the increased thrust in domestic shipbuilding has played a major role in the boost in credit.

“Major international shipbuilders are already operating at near-full capacity, with sizable order books extending over the next 3–5 years. This limits India’s ability to quickly procure new vessels from international shipping companies, making it imperative to scale up indigenous shipbuilding capabilities,” he said.

In fact, the government of India on Saturday notified the revamped shipbuilding financial assistance policy through a comprehensive package totalling nearly ₹44,700 crore, where it will provide financial assistance for new domestically made vessels and for the development of new shipbuilding clusters and shipyards.

Moreover, Vashisht added that the granting of infrastructure status to large commercial vessels of 10,000 gross tonnage (GT) or more under Indian ownership and flag, or vessels of 1,500 gross tonnage and above that are built in India, has increased access to more affordable and long-term financing.