Indian Economy News

Govt Notifies Guidelines for Shipbuilding Assistance, Development Schemes Rs. 44,700 Crore (US$ 5.4 billion) Outlay to Boost India’s Shipbuilding Capacity

The Government of India, under the Ministry of Ports, Shipping & Waterways, has notified the operational guidelines of two revolutionary shipyard schemes: the Shipbuilding Financial Assistance Scheme (SBFAS) and the Shipbuilding Development Scheme (SbDS) together allocated Rs. 44,700 crore (US$ 5.4 billion) to develop the domestic shipyard sector of India. The Shipbuilding Financial Assistance Scheme (SBFAS) scheme will allocate funds to domestic shipyards with an allocated resource base of Rs. 24,736 crore (US$ 3.0 billion) to shipyards that will offer graded financing assistance of 15%-25%, categorized vessel-wise financing support. It will disburse loans stage-wise to vessels as milestones against disbursements to bring clarity among stakeholders regarding the funding allocation. Shipbuilding Financial Assistance Scheme (SBFAS) proposes to offer a Ship-Breaking Credit Note to shipowners to scrap ships registered at Indian shipyards to offer a credit note of 40 % of the total scrap value to make ship scrapping part of shipyard development. Shipbuilding Financial Assistance Scheme (SBFAS) is estimated to offer financing to a total of Rs. 96,000 crore (US$ 11.5 billion) within the coming decade.
The Shipbuilding Development Scheme (SbDS), which has been allocated Rs.19,989 crore (US$ 2.4 billion), aims at capacity augmentation through greenfield shipbuilding parks and modernization of existing brownfield shipyards, in addition to establishing the India Ship Technology Centre through the Indian Maritime University to facilitate research, design, and skills augmentation. The greenfield projects will be given 100% assistance in terms of capital for shared facilities, and the existing shipyards will be allowed 25% assistance for the augmentation of essential infrastructure. These initiatives are expected to increase the country’s shipyard capacity to ship 4.5 million tonnage of ships every year by 2047. The Shipbuilding Development Scheme (SbDS) will certainly give boost to maritime security, shipbuilding technologies, and overall economic security. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.