Report: Union Budget 2025: A Big Push for India’s Shipbuilding Industry
a significant move to bolster India’s maritime capabilities, the Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, announced a comprehensive strategy to rejuvenate the nation’s shipbuilding industry. initiative aligns with Prime Minister Narendra Modi’s vision of establishing India as a developed nation by 2047, emphasizing the creation of world-class infrastructure and self-reliance in critical sectors.
Maritime Development Fund (MDF): A Financial Catalyst
At thheart of this strategy is the establishment of a Maritime Development Fund (MDF) with a substantial corpus of ₹25,000 crore (approximately $3 billion). The gnment will contribute 49% of this fund, with the remaining capital mobilized from ports and private sector entities. The MDFs to provide long-term, low-cost financing to the shipbuilding and repair industry, addressing the sector’s financial constraints and promoting sustainable growth.
Revamping the Shipbuilding Financial Assistance Policy further incentivize domestic shipbuilding, the government plans to revamp the existing Shipbuilding Financial Assistance Polichis overhaul seeks to mitigate cost disadvantages faced by Indian shipyards, making them more competitive on the global stage. The revised policy will include credit notes for shipbreaking activities in Inan yards, promoting circular economy and encouraging the scrping of old vessels to make way for new, more efficient ships.
Promotion of Shipbuilding Clusters
Recognizing the importance of a robust ecosm, the budget proposes the development of shipbuilding clusters. These clusters will encompass additional infrastructure facilities, skill delopment programs, d technological advancements to enhance the industry’s overall capacity and pabilities. By fostering such clusters, the government aims to create a conducive environment for innovation and efficiency in ship production and repair.
Tax Exemptions and Inclusion in Infrastructure Harmonized Master List
In a bid to reduce operational costs, the government has extendedhe import tax exempon on inputs required for shipbuilding and shireaking activities by an additional 10 years. This move is expected to lower production expenses and encourage investment in the sectorrthermore, large ships above a specified size will now be included in the infrastructure harmon master list, facilitating easier access to infrastructure credit for shipbuilders.
Establishment of a New Shipping Company
To expand the nation’s sing fleet and reduce reliance on foreign carriers, the government plans to establish a new shipping company. This venture will involve participation from oil refiners the Shipping Corporation of India. By bolstering the domestic fleet, India aims to retain freight payments within the country and enhance its strategic autonomy in maritime logistics.
Industry Response and Future Outlook
The announcement of these initiatives has been met with optimism within the maritime industry. Shares of the Shipping Corporation of India experienced a 3.8%ick following the budget presentation, reflecting investor confidence in the sector’s revitalization. Industry experts believe that these measures will not only enhance the cetitiveness of Indian shipyards but also position India as a significant player in the global shipbuilding market.
Conclusion
The Union Budget 2025’s emphasis on shipbuilding marks a pivotal step toward strengthening India’s maritime infrastructure. Through financial incentives, policy reforms, and strategic collaborations, the government aims to rejuvenate the shipbuilding industry, fostering economic growth and enhancing national security. As these initiatives unfold, India is poised to emerge as a formidable force in the global maritime arena, steering the nation toward a future of self-reliance and prosperity.
Also Read: Hapag-Lloyd Adjusts South East India-Europe Express Service, Enhancing Connectivity and Efficiency
