In December 2025, the Ministry of Ports, Shipping & Waterways (MoPSW) notified the operational guidelines for two key shipbuilding initiatives, the Shipbuilding Financial Assistance Scheme (SBFAS) and the Shipbuilding Development Scheme (SbDS), with total budget outlay of Rs 44,700 crore.
- These initiatives aimed to strengthen India’s domestic capacity building and enhance global competitiveness.
- As per MoPSW, both initiatives will remain valid until March 31, 2036, with an in-principle extension envisaged up to 2047.
Exam Hints:
- What? Notification of operational guidelines for major shipbuilding initiatives
- Notified by: MoPSW
- Major Initiatives: Shipbuilding Financial Assistance Scheme (SBFAS) and Shipbuilding Development Scheme (SbDS)
- Total Budget: Rs 44,700 crore, including SBFAS (Rs 24,736 crore) and SbDS ( Rs 19,989 crore)
- Validity of Schemes: Until March 31, 2036
- Financial Assistance under SBFAS: 15% to 25% per vessel based on the category
- Other Key Features of SBFAS:
- Establishment of a National Shipbuilding Mission;
- Shipbreaking Credit Note (40% of scrap value as credit);
- Mandatory independent valuation and milestone-based assessments
- Key Features of SbDS:
- Development of greenfield shipbuilding clusters;
- Modernisation of existing brownfield shipyards;
- Setting up of ISTC under IMU, among others
Guidelines for SBFAS:
Financial Assistance: Under SBFAS with a budgetary allocation of Rs.24,736 crore, the Government of India (GoI) will extend financial assistance of 15%–25% per vessel, depending on the vessel category.
Support: The scheme offers graded support for small normal, large normal, large normal, and specialised vessels, with stage-wise disbursement linked to defined milestones and support by security instruments. It also included incentives for series orders.
National Shipbuilding Mission(NSM): The scheme also provides for the establishment of a NSM, aimed to ensure coordinated planning and execution of shipbuilding initiatives.
Shipbreaking Credit Note: It also features a shipbreaking credit note which offers 40% of scrap value as credit to shipowners scrapping vessels at Indian yards.
Independent Valuation: The scheme has mandated independent valuation and milestone-based evaluations to bolster governance and ensure efficient use of public funds.
Significance: SBFAS is expected to support shipbuilding projects worth about Rs 96,000 crore over the next 10 years, boost domestic manufacturing and generate job opportunities across the maritime value chain.
Guidelines for SbDS:
Focus Area: The SbDS, with a budget outlay of Rs.19,989 crore, primarily focuses on long-term capacity and capability building within the domestic shipbuilding sector.
Key Benefits: The scheme facilitates the development of greenfield shipbuilding clusters, modernisation of existing brownfield shipyards, and the setting up of an Indian Ship Technology Centre (ISTC) under the Indian Maritime University (IMU), aimed to support research, design, innovation and skills development.
Funding Structure: Greenfield shipbuilding clusters under SbDS, will receive 100% capital support for common maritime and internal infrastructure through a Centre-State (50:50) Special Purpose Vehicle (SPV).
- In addition to that, the existing shipyards will also be eligible for 25% capital assistance for brownfield expansion of critical infrastructure like: dry docks, shiplifts, fabrication facilities and automation systems.
Credit Risk Coverage Framework: The scheme also introduces a Credit Risk Coverage Framework which offers government-supported insurance for pre-shipment, post-shipment, and vendor-default risks to enhance project bankability and financial resilience.
Key Projection: These initiatives are projected to raise India’s commercial shipbuilding capacity to about 4.5 million gross tonnage per annum by 2047.
About Ministry of Ports, Shipping & Waterways (MoPSW):
Union Minister- Sarbananda Sonowal (Constituency- Dibrugarh, Assam)
Minister of State (MoS)- Shantanu Thakur (Constituency- Bangaon, West Bengal, WB).
