Centre Plans Policy Boost to Expand Shipbuilding Yards, Develop New Clusters.

The Indian government is fast-tracking a $2–3 billion (₹16,000 crore) policy initiative to modernize and expand shipbuilding yards amid growing interest from global shipping giants, including Mediterranean Shipping Company (MSC). The Ministry of Ports, Shipping, and Waterways is working on funding details to address capacity constraints at state-run shipyards, officials told businessline.

With China’s shipbuilding industry operating at full capacity for the foreseeable future and global demand for new vessels rising, India sees an opportunity to strengthen its shipbuilding capabilities. The proposed policy will focus on modernizing existing shipyards, expanding capacity, and setting up new shipbuilding clusters in key coastal states such as Andhra Pradesh and Odisha.

Officials confirmed that MSC has held preliminary discussions to establish a greenfield shipbuilding and repair yard, likely in Gujarat, and is exploring partnerships. Other European firms, including those from France and Denmark, have also expressed interest in investing in India’s shipbuilding sector.

“If MSC were to place an order for 50–60 ships, India currently lacks the capacity and expertise to handle such a scale. This has prompted a policy rework to support large-scale shipbuilding,” a senior official said.

The new initiative will complement existing efforts, including the ₹25,000-crore Maritime Development Fund and the ₹18,000-crore Shipbuilding Financial Assistance Policy (SBFA 2.0), which is awaiting Cabinet approval.

The policy will also promote skill development, technology upgrades, and infrastructure enhancements such as breakwaters—man-made structures that protect harbors and facilitate safe docking. The government is also engaging with shipbuilders in South Korea and Japan, with industry players expected to visit India in the coming weeks to explore investment opportunities.

While the central government could bear up to 50% of the financial burden (around ₹8,000 crore), additional funding is expected from financial institutions, multilateral agencies, and soft-loan arrangements.

By establishing world-class shipbuilding clusters and attracting foreign investment, India aims to position itself as a competitive player in the global maritime sector.

HBL