Union Budget 2025: What Shipbuilding Industry Received?

The Union Budget has placed significant emphasis on unlocking the vast potential of India’s shipping sector. This forward-thinking plan aims to further empower the country’s shipbuilding industry through innovative measures that will drive investment, generate economic growth, create jobs, and add long-term value.

Plans to Develop Maritime Development Fund (MDF)

To support India’s maritime sector, the Union Budget proposes the establishment of the Maritime Development Fund (MDF), which will provide financial assistance in the form of equity or debt securities. The initial corpus of ₹25,000 crores will be funded 49% by the government, with the remaining contribution coming from major port authorities, other government entities, central PSEs, financial institutions, and the private sector.

This fund will primarily finance ship acquisition and aims to increase the share of Indian-flagged ships in global cargo volume to 20% by 2047. Furthermore, a stronger indigenous fleet will reduce reliance on foreign ships, improve the Balance of Payments, and protect the country’s strategic interests. By 2030, MDF is expected to generate investments of up to ₹1.5 lakh crore in the shipping sector.

Boost to Shipbuilding Industry

The Union Budget also provides a major boost to India’s domestic shipbuilding industry with the announcement of new mega shipbuilding clusters. This initiative will offer direct capital support through the creation of breakwaters and capital dredging. Additionally, it proposes a 10-year rent holiday for land not provided at nominal rates and aims to support essential infrastructure such as roads, utilities, and sewage treatment. A proposed ₹6,100 crore allocation will help upgrade, modernize, and automate existing shipyards, improving efficiency, utilisation, and overall output.

The Budget has extended the Shipbuilding Financial Assistance Policy (SBFAP) 2.0, which offers direct financial subsidies to Indian shipyards. This policy seeks to help secure orders by offsetting operational cost disadvantages, thereby strengthening the domestic shipbuilding sector. The scheme, supported by budgetary funding, has an outlay of ₹18,090 crores.

Allocation of Funds

Recognising the importance of skilled professionals, the Budget has allocated funds for training and development in the maritime industry to position India as a global leader in maritime human capital. This includes the establishment of Shipbuilding Capability Development Centres (SCDC) to support innovative ship design, engineering solutions, and testing of shipping projects, with ₹1,200 crores earmarked for this purpose.

An additional ₹1,040 crores will support capital and operational assistance to private sector shipbuilding design and training centres. Moreover, ₹610 crores will be allocated for a support scheme to fund research and development (R&D) and innovation in ship technology, encouraging the development of new and improved shipbuilding technologies. These initiatives are expected to generate 1.1 million direct or indirect jobs.

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