New Delhi, Sep 24: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a comprehensive package of Rs 69,725 crore to revitalise India’s shipbuilding and maritime ecosystem.

The overall package is expected to unlock 4.5 million Gross Tonnage of shipbuilding capacity, generate nearly 30 lakh jobs, and attract investments of approximately Rs 4.5 lakh crore into India’s maritime sector.

Under this package, the Shipbuilding Financial Assistance Scheme (SBFAS) will be extended until March 31, 2036, with a total corpus of Rs 24,736 crore.

The scheme aims to incentivise shipbuilding in India and includes a Shipbreaking Credit Note with an allocation of Rs 4,001 crore. A National Shipbuilding Mission will also be established to oversee the implementation of all initiatives.

The package introduces a four-pillar approach designed to strengthen domestic capacity, improve long-term financing, promote greenfield and brownfield shipyard development, enhance technical capabilities and skilling, and implement legal, taxation, and policy reforms to create a robust maritime infrastructure, according to a Cabinet note.

In addition, the Maritime Development Fund (MDF) has been approved with a corpus of Rs 25,000 crore to provide long-term financing for the sector.

This includes a Maritime Investment Fund of Rs 20,000 crore with 49 per cent participation from the government and an Interest Incentivisation Fund of Rs 5,000 crore to reduce the effective cost of debt and improve project bankability.

Furthermore, the Shipbuilding Development Scheme (SbDS), with a budgetary outlay of Rs 19,989 crore, aims to expand domestic shipbuilding capacity to 4.5 million Gross Tonnage annually, support mega shipbuilding clusters, infrastructure expansion, establish the India Ship Technology Centre under the Indian Maritime University, and provide risk coverage, including insurance support for shipbuilding projects, according to the Cabinet.

"Beyond its economic impact, the initiative will strengthen national, energy, and food security by bringing resilience to critical supply chains and maritime routes. It will also reinforce India’s geopolitical resilience and strategic self-reliance, advancing the vision of Aatmanirbhar Bharat and positioning India as a competitive force in global shipping and shipbuilding," the Cabinet noted.

Today, the maritime sector remains a backbone of the Indian economy, supporting nearly 95 per cent of the nation’s trade by volume and 70 per cent by value. (IANS)