Shipbuilding Financial Assistance Policy (2025)

Imagine a country that builds world-class ports and runs a substantial merchant fleet, yet imports almost every large commercial vessel that fleet actually sails, because domestic shipyards have never been cost-competitive enough for Indian shipping companies to order from them at scale. That was India's shipbuilding reality for decades, and the September 2025 Shipbuilding Financial Assistance Policy is the government's most serious attempt yet to change it.

Approved by the Union Cabinet on 24 September 2025 with a Rs 69,725 crore outlay, the policy directly subsidises Indian shipyards building vessels for domestic and export customers, offering financial assistance of roughly 15 to 25% on qualifying vessels, alongside a 40% ship-breaking credit note that gives shipowners a further financial incentive to scrap old vessels and order replacement ships specifically from Indian yards rather than abroad.

The policy also tackles demand directly, not just shipyard cost competitiveness, through demand aggregation involving India's own oil and gas public sector undertakings, which operate substantial fleets of tankers and support vessels and can commit meaningful, guaranteed order volume to domestic shipyards, giving Indian shipbuilders the kind of large, predictable order pipeline needed to justify serious capacity investment.

The ambition is explicit and large: over 110 domestically built vessels targeted over the coming decade, against an estimated total requirement of roughly 430 ships over the same period and an estimated Rs 2 lakh crore in associated investment, alongside a further Rs 3 lakh crore commitment to developing dedicated shipbuilding clusters under the broader Maritime Amrit Kaal Vision 2047. Cochin Shipyard's October 2025 letter of intent from global shipping major CMA CGM, to build six LNG-powered feeder vessels with technology support from Hyundai Heavy Industries, is an early, concrete signal the policy is already attracting genuine international commercial interest.

Whenever an Indian shipyard announces a major new order from either a domestic PSU or an international shipping line, the 2025 Shipbuilding Financial Assistance Policy's subsidies and demand aggregation mechanisms are very often a direct part of why that order landed in India rather than at an established shipbuilding hub in South Korea, China or Japan.