India's Comprehensive Shipbuilding Revitalization Package
The Government of India has implemented a comprehensive 4-pillar strategy to revitalize the shipbuilding sector following measures announced in the Union Budget 2025–26. The package totals ₹69,725 crore and aims to strengthen domestic shipbuilding capacity, maritime financing, and skilling initiatives.
Financial Components and Schemes
The package includes three major financial components: the Shipbuilding Financial Assistance Scheme (SBFAS) with an outlay of ₹24,736 crore to address cost disadvantages of Indian shipyards; a Maritime Development Fund (MDF) corpus of ₹25,000 crore comprising a Maritime Investment Fund (₹20,000 crore) and Interest Incentivisation Fund (₹5,000 crore) for long-term financing support; and the Shipbuilding Development Scheme (SbDS) with ₹19,989 crore outlay to expand Indian shipbuilding output capacity to 4.5 million Gross Tonnage annually through greenfield clusters and existing yard expansion.
Policy Reforms and Infrastructure Status
Significant policy reforms include the classification of large vessels as infrastructure, notified on 19th September 2025. Indian-flagged commercial vessels with Gross Tonnage of 10,000 or above received infrastructure status, while vessels constructed in India of size 1,500 GT or above were accorded the same status. A fleet acquisition plan of 400+ vessels has been prepared as part of demand aggregation to provide long-term order visibility to Indian shipyards.
Implementation Progress
Scheme guidelines for SBFAS were issued on 26 December 2025, with in-principle approvals for shipbuilding financial support given according to guidelines. MDF guidelines were issued on 20 February 2026, and SBI Ventures Limited was appointed as Fund Manager for MIF on 26 May 2026. Under SbDS, in-principle approval has been given for three greenfield shipbuilding clusters at Andhra Pradesh, Gujarat, and Tamil Nadu, with financial assistance for common maritime and land-based infrastructure.
Institutional Development and Skilling
The India Ship Technology Centre (ISTC) has been established as a Section 8 company to promote sector development through enhanced capabilities in ship design, R&D, skill development, and software. Skilling initiatives include 11 shipyards signing MoUs with 34 ITIs across 8 coastal states implementing a 150-hour On the Job Training model, with 727 trainees already trained. A Training of Trainers program has been implemented at 2 ITIs in West Bengal, a preliminary Skill Gap Study completed across 9 shipyards, and 92,697 candidates trained/skilled/upskilled during the last 3 years. A Plan of Implementation has been signed with Korea International Cooperation Agency (KOICA) for a skill development project.
Results and Impact
According to UN Trade and Development (UNCTAD) report, India's shipbuilding output increased by 41% from 40,923 GT in 2024 to 57,637 GT in 2025. The package has resulted in placement of several large commercial and export shipbuilding orders, with in-principle approvals given for financial assistance under SBFAP and SBFAS for total contract value of ₹15,234 crore over the last two years. Under SbDS, in-principle approval has been given to four shipyards for brownfield capacity augmentation at total estimated cost of over ₹2,500 crore. Given the industry's high employment multiplier of 6.4, these developments have catalyzed generation of substantial direct and indirect employment.