India's Comprehensive Shipbuilding Upgrade Drive: Green Tech Push, Financial Incentives, Mega Infrastructure And Global Partnership

Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal outlined an extensive set of measures taken by the government to upgrade and modernise India’s shipbuilding sector in a written reply to the Rajya Sabha.

Sonowal highlighted the recent amendment to the Shipbuilding Financial Assistance Policy (SBFAP) on 29 January 2025 to encourage greater participation in shipbuilding.

Provisions introduced in August 2023 also grant flat 30 per cent assistance for vessels using green fuels such as methanol, ammonia or hydrogen fuel cells, and 20 per cent for fully electric or hybrid propulsion systems.

To strengthen domestic capabilities, the government has released five Standard Tug Designs for major ports, revised the Right of First Refusal (RoFR) hierarchy to favour Indian-built and Indian-flagged vessels, and launched the Green Tug Transition Programme alongside Harit Nauka guidelines for greener inland waterway vessels.

The minister also referred to budget announcements including the creation of a Rs 25,000 crore Maritime Development Fund, formation of shipbuilding clusters, continued customs duty exemptions on ship manufacturing materials, and inclusion of large ships in the harmonised infrastructure list.

On infrastructure, Cochin Shipyard Limited has commissioned two major projects: a Rs 1,799 crore, 310 metre dual-purpose dry dock, one of India’s largest and a Rs 970 crore International Ship Repair Facility (ISRF) with advanced shiplift and berthing capabilities.

Cochin Shipyard has signed MoUs with leading global shipbuilding and engineering firms, including Fincantieri and HD Korea Shipbuilding, to enhance design, manufacturing, and skill development.

Sonowal emphasised that these efforts, coupled with adherence to the Public Procurement (Preference to Make in India) Order, 2017, are aimed at increasing shipbuilding activities in Indian shipyards while increasing sustainability and global competitiveness.

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