4-Pillar Approach to Strengthen Shipbuilding, Maritime Financing, and Domestic Capacity
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The Union Cabinet approved a major Rs. 69,725 crore packages to strengthen shipbuilding, maritime financing, and domestic capacity to revitalize the country's maritime sector.
Pillars of the Approach:
- Strengthening Domestic Shipbuilding Capacity
- Expansion of domestic shipbuilding capacity to 4.5 million Gross Tonnage annually.
- Support for mega shipbuilding clusters and infrastructure development.
- Establishment of the India Ship Technology Centre under Indian Maritime University.
- Creation of a National Shipbuilding Mission to oversee the initiatives.
- Aim: Position India as a global shipbuilding player to reduce dependence on foreign vessels which currently dominate imports.
- Improving Long-term Maritime Financing
- Creation of a Maritime Development Fund (MDF) with Rs. 25,000 crore corpus.
- Includes Maritime Investment Fund of Rs. 20,000 crore (with 49% Government participation) and Interest Incentivization Fund of Rs. 5,000 crore to reduce cost of debt and improve project bankability.
- Financial assistance and incentives for shipbuilding projects.
- Promoting Greenfield and Brownfield Shipyard Development
- Support for both greenfield (new) and brownfield (existing) shipyard projects to enhance capacity and technical capabilities.
- Risk coverage including insurance support for shipbuilding projects.
- Legal, Taxation, and Policy Reforms
- Implementation of reforms to create a robust maritime infrastructure.
- Inclusion of Shipbreaking Credit Note scheme enabling scrap value utilization towards new vessel construction.
- Technical skill enhancement and capacity building for the maritime workforce.
Additional Highlights
- The Shipbuilding Financial Assistance Scheme (SBFAS) extended till March 2036 with Rs. 24,736 crore corpus.
- Expected to attract investments of approximately Rs. 4.5 lakh crore into the maritime sector.
- Strategic importance: Enhances national security, energy, and food security by building resilient maritime supply chains and routes.
- Aims to reduce India's current reliance on foreign ships, which is about 95% by volume of trade.
This package is considered the most significant reform in Indian shipbuilding since independence and addresses capacity, financing, infrastructure, and policy in a coordinated manner to foster long-term growth and global competitiveness.
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