Budget 2025 offers slew of incentives
The Union Budget has provided a shot-in-the-arm to India’s domestic shipbuilding industry after it announced new mega shipbuilding clusters in the country.
This scheme will provide direct capital support in the form of creating the breakwater along with capital dredging. It also proposes a 10-year rent holiday for the land, if not provided at a nominal rate.
Investment is also designed to support creation of trunk infra like roads, utilities, sewage treatment among others.
The proposed allocation of Rs 6,100 crore aims to support India’s existing shipyards in upgrading, modernising, and automating their operations, enhancing efficiency, utilisation, and overall output.
Similarly, the Union Budget has also extended the Shipbuilding Financial Assistance Policy (SBFAP) 2.0, aimed at providing direct financial subsidies to Indian shipyards.
This initiative seeks to help in securing orders by offsetting operational cost disadvantages, thereby strengthening the domestic shipbuilding industry.
To be financed via Budgetary support, the total outlay of the scheme is Rs 18,090 crores. Another innovative scheme announced in the budget is the Shipbreaking Credit note.
This scheme incentivises Ship Scrapping by issuing a Credit Note of 40% of the scrap value which can be reimbursed to buy new Made in India ships.
Highlighting the need to develop trained professionals in the sector, the budget allocated specific funds for training and development of human resources in order to leverage India’s position as a global leader in maritime human capital.
The budget provided for Shipbuilding Capability Development Centres (SCDC) is aimed propping up platform for development of innovative ship design and engineering solutions as well as testing & evaluation of Shipping projects.
An outlay of Rs 1200 crores have been earmarked for this. Additional provision of Rs 1040 crores have been announced for providing capital and operational assistance to the existing and upcoming shipbuilding design and training centres from the private sector.
A budgetary allocation of Rs 610 crores is proposed for a support scheme for Research & Development & innovation in ship technology.
This initiative will foster development of new and improved shipbuilding technologies. New incentives are projected to generate 11 lakhs of direct or indirect employment.
The Union Budget also proposes to include Large Ships of certain size in to the Infrastructure Harmonised Master List (HML).
In addition, the Union Budget proposed to set up Maritime Development Fund (MDF) to support India’s Maritime sector by providing financial assistance, via equity or debt securities.
The initial corpus of the fund is pegged at Rs 25,000 crores – where the Government contribution will be 49%, the minister said. The remaining balance will be contributed by Major port authorities, other government entities, Central PSEs, Financial Institutions as well as private sector. This will benefit in financing for ship acquisition.
