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India's Shipbuilding Boom: 70,000 Crore Boost
9 Oct
Summary
- India unveiled a ₹70,000 crore package to boost its shipbuilding sector.
- Over 100 vessels are expected to be ordered in the next two years.
- Shipping now has infrastructure status, enabling longer loan terms.
India is making a concerted push to establish a globally competitive shipbuilding industry, supported by an extensive ₹70,000 crore package. This strategic effort, announced last year, focuses on an ecosystem approach, encompassing demand aggregation, enhanced shipyard infrastructure, and robust financial backing. The government has identified a demand for more than 100 vessels within the coming two years, providing shipyards with crucial order visibility.
Significant policy changes include granting infrastructure status to shipping, which extends loan tenures up to 25 years and lowers borrowing costs. Additionally, an interest incentive scheme offers subvention of up to 3%. These measures aim to improve the financial viability of shipbuilding projects and attract greater private investment, with international firms like MSC already placing orders.
The former shipping secretary highlighted the recent enactment of five key laws as a turning point. Further supporting domestic capabilities, a technology center is fostering research, development, and design. The sector's growth is anticipated to extend beyond green vessels, encompassing replacement demand and ship recycling opportunities, making it an opportune time for industry entry.
