India working on ₹25,000 cr maritime fund & shipbuilding reforms to transform industry : Sarbananda Sonowal
NEW DELHI : The Shipping Ministry has carried out a detailed study and has got inputs from multiple stakeholders, and is in the process of “finalising schemes for assisting shipbuilding.” This includes setting up a ₹25,000-crore Maritime Development Fund, aimed at providing low-cost, long-term financing options.
The schemes will include renewal of an updated Shipbuilding Financial Assistance Policy (SBFAP 2.0) with special incentives for green ships, ship breaking credit notes, establishment of an apex body to steer the implementation of SBFAP 2.0, among others, Union Minister for Ports, Shipping and Waterways, Shri Sarbananda Sonowal, told.
India saw a 22 per cent increase in India-flagged ships or vessels over a 10 year period to 1526 in 2023-24
As per Ministry data, India in FY24, built ships with 26,412 gross tonnage (GT), recording a 19 per cent y-o-y increase.
Maritime Development Fund
The big push though will be towards setting up a ₹25,000-crore Maritime Development Fund, for providing low-cost, long-term financing to the maritime sector.
“This fund addresses the decline in India’s share of overseas cargo carried by Indian flagged vessels; and mitigates risks associated with foreign fleet reliance,” Sonowal said.
According to him, the economic impact includes increased ship acquisition and Indian ownership, job creation, energy, food, and economic security, supply chain resilience, forex and GDP growth.
“The fund is expected to support creation of Special Purpose Vehicles (SPVs) for procuring and operating around 1,000 Indian-built ships over the next decade apart from supporting financial needs in other areas of maritime development,” the Minister added.
Assistance Policy
The second phase of the SBFAP, will consider special incentives for green ships, which usage low carbon emitting fuels or green hydrogen, Sonowal said.
Reforms in the ship-breaking industry are being worked on too. Points under consideration include issuing credit notes to the shipowner when their vessel is scrapped in an Indian yard. This would be reimbursable against the cost of construction of a new vessel, if the same is being constructed at an Indian shipyard.
“An apex body to steer the implementation of SBFAP 2.0 and coordinate the other initiatives for growth of shipbuilding industry such as establishment of infrastructure capacity, development of capabilities and skills is being considered too,” he said.
Capacity Building
In terms of capacity building activities, a separate set of proposals are “under preparation at MoPSW”. Some of the points being taken up include establishing a national centre for shipbuilding capability that will offer courses, apprenticeships, and internships to Indian manpower in the maritime sector.
“Incentives to industry for research and development in the shipbuilding sector; and funding of common maritime assets and test facilities for the shipbuilding sector are being looked into,” Sonowal said.
Incentives for industry players to establish new shipbuilding facilities, ancillary units as well as supporting industries such as container manufacturing in the country in collaboration with coastal states will also be taken up.