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2025 February 3   17:35

India announces $2.9 bln investment to boost maritime sector

India has announced plans to significantly enhance its maritime sector, with a focus on shipbuilding, repair, and industry modernization. Finance Minister Nirmala Sitharaman detailed these initiatives during the recent budget presentation.

A 250-billion rupee ($2.9 billion) Maritime Development Fund will be established to provide long-term, low-cost financial assistance to the shipbuilding and repair industry. The government will contribute 49% of the fund, with the remaining portion sourced from major port authorities, other government entities, central public sector enterprises, financial institutions, and the private sector.  

The government plans to develop new shipbuilding clusters, each with a capacity of 1.0 to 1.2 million gross tonnage. These clusters will receive support for infrastructure development, including breakwater construction, capital dredging, and utilities. A 10-year rent holiday for land will be provided to attract private investment and promote modernization. 

The Shipbuilding Financial Assistance Policy has been extended, offering direct financial subsidies totaling ₹18,090 crores to Indian shipyards. This initiative aims to offset operational costs and strengthen the domestic shipbuilding industry. 

A new scheme will incentivize ship scrapping by issuing credit notes worth 40% of the scrap value. These notes can be redeemed towards the purchase of new, India-made ships, promoting the renewal of the fleet with domestically built vessels. 

₹6,100 crores has been allocated to upgrade, modernize, and automate Indian ports, enhancing efficiency and overall output. 

The Basic Customs Duty exemption on inputs for shipbuilding and shipbreaking has been extended for 10 years, reducing costs and encouraging industry growth. 

Specific funds have been allocated to establish Shipbuilding Capability Development Centers with an outlay of ₹1,200 crores to foster innovative ship design and engineering solutions. An additional ₹1,040 crores is allocated to support existing and upcoming shipbuilding design and training centers in the private sector. 

A support scheme for research and development in ship technology will receive ₹610 crores to promote new and improved shipbuilding technologies. 

Large ships will be included in the HML, making them eligible for benefits such as easier access to long-term financing and tax incentives, attracting private investment and enhancing fleet modernization. 

The Tonnage Tax Scheme is now extended to inland vessels, making investment in inland waterways vessels more financially viable. 

The extension of the PM GATI SHAKTI Portal to private players will bring efficiency in cargo movement through multimodal infrastructure planning at a more economical rate.

These measures are expected to generate about 1.1 million direct and indirect employment opportunities.

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