In 2025, the Indian government launched the Shipbuilding Development Scheme (SbDS) with a budget outlay of IN₹ 19,989 crore to scale up domestic shipbuilding capacity to 4.5 million Gross Tonnage annually. The scheme focuses on developing large shipbuilding clusters, expanding infrastructure, and setting up an India Ship Technology Centre under the Indian Maritime University. It also includes provisions for risk coverage, such as insurance support for shipbuilding projects.
Under the SbDS, new shipbuilding clusters developed on greenfield sites will get full capital funding for common maritime and internal infrastructure, implemented through a 50:50 special purpose vehicle between the Centre and state governments. In contrast, existing shipyards will receive 25% capital support for brownfield expansion, covering key facilities such as dry docks, shiplifts, fabrication units, and automation systems.
The scheme also brings in a Credit Risk Coverage Framework, which offers government-backed insurance against pre-shipment, post-shipment, and vendor default risks. This is intended to make shipbuilding projects more financially viable and improve their ability to secure funding.
The scheme envisages setting up three to four greenfield shipbuilding clusters, distributed across states on a one-cluster-per-state basis.
The proposed greenfield shipbuilding clusters are to be developed as plug-and-play infrastructure designed to support a fully integrated shipbuilding and repair ecosystem. Each cluster is expected to feature a waterfront of around 2 km and a total landside area of approximately 2,000 acres, including about 1,000 acres allocated across shipyards, ancillary industries, internal and social infrastructure, and shared facilities.
The ancillary ecosystem is envisaged to include units engaged in engine manufacturing, steel and component fabrication, as well as suppliers of shipboard machinery, equipment, and systems, alongside other supporting industrial activities that strengthen the broader shipbuilding and repair value chain.
Each cluster will host one or more large shipyards, with an overall production capacity of roughly 1.2 million gross tonnage (GT) per annum. The special purpose vehicle (SPV) responsible for development is required to secure firm investment commitments from one or more anchor shipyards to establish facilities within the cluster. At least one anchor shipyard must have a design capacity of no less than 0.5 million GT per annum, to be achieved within ten years of commissioning.
Further, the anchor shipyard(s) will be required to provide a binding commitment not to divest, transfer, lease, or repurpose the facility for non-shipbuilding activities for a minimum period of ten years from project completion, unless prior approval is obtained from the National Shipbuilding Mission.
The first special purpose vehicle (SPV) under the SbDS was announced earlier this year, named the National Shipbuilding & Heavy Industries Park, to be established in the Indian state of Tamil Nadu.
The SPV is structured as a 50:50 joint venture between the central government-owned V. O. Chidambaranar Port in Thoothukudi, Tamil Nadu and the State Industries Promotion Corporation of Tamil Nadu, and it will function as the primary institutional mechanism for developing integrated maritime industrial parks, shared user infrastructure and common services, while also enabling capital monetisation with potential involvement from a government-nominated agency.
It will establish a large-scale shipbuilding hub in the city of Tuticorin, incorporating both land-based and maritime infrastructure, form joint ventures with shipbuilding firms, and lease essential assets such as dry docks and heavy-lift cranes.
A day after the announcement of this SPV in Tamil Nadu, news emerged of Mumbai Port Authority (MPA) and the Maharashtra government also planning to set up an equally owned special purpose vehicle (SPV).
“We have communicated our intent to partner with the Maharashtra government and its designated agencies to set up the national mega shipbuilding cluster,” M Angamuthu, Chairman, Mumbai Port Authority, was cited as saying by ET Infra on January 30th.
“The project is proposed to be developed under a landlord model, following which further action relating to funding, infrastructure development and investment facilitation would be initiated,” Angamuthu stated.
The Maharashtra government has hired a consultant to write a Techno-Economic Feasibility Report (TEFR) for three locations – Nandgaon, Dighi and Vijaydurg – and prepare a Detailed Project Report (DPR) for one selected cluster within six months.
Other than that, the MoPSW has designated several other ports for the proposed greenfield shipbuilding clusters, which include Deendayal Port Authority in Gujarat, Visakhapatnam Port Authority in Andhra Pradesh, Paradip Port Authority in Odisha, Syama Prasad Mookerjee Port Authority in West Bengal, New Mangalore Port Authority in Karnataka, Cochin Port Authority in Kerala, and Mormugao Port Authority in Goa.
These aforesaid schemes are key components of the Indian government’s broader maritime policy architecture, which comprises the Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047.
The Maritime India Vision 2030 aims to capture 5% share of the global shipbuilding market for India by 2030, and within this context, the financial incentives and cluster-based infrastructure development are intended to serve as demand- and supply-side enablers by reducing cost disadvantages for domestic yards while simultaneously expanding industrial capacity.
Looking further ahead, these schemes are embedded within the long-term framework of Maritime Amrit Kaal Vision 2047, which sets out an ambition to transform India into a leading global maritime hub by the centenary of independence. The vision places strong emphasis on scaling up shipbuilding capacity, fostering indigenous manufacturing ecosystems, promoting green shipping technologies, and significantly increasing the share of Indian-flagged vessels in global trade.
Taken together, these changes mark a shift from a limited support scheme to a more comprehensive policy framework designed to boost domestic capacity, enhance competitiveness, and build a sustainable maritime industrial base.
CONTINUED ON NEXT PAGE