Indian Shipbuilding Industry Gets A Lift With New Financial Assistance Scheme

In order to promote the "Make in India" policy and to support shipbuilding industry in India, the Shipping Ministry has brought in the Shipbuilding Financial Assistance Policy (SBFAP) scheme for Indian shipyards to procure orders from domestic as well as international markets and to be competitive in the international market for securing global orders.

The scheme offers financial assistance to Indian shipyards for shipbuilding contracts signed between 1 April 2016 and 31 March 2026 with rate of financial assistance starting from 20 per cent in 2016 and diminishing to 11 per cent in 2026.

The SBFAP scheme has played a crucial role in securing various orders both domestically and internationally by public and private shipyards at competitive values.

From the data available in the SBFAP scheme, about 88 vessel orders have been procured by 31 Shipyards during the last 4 years from domestic as well as export orders and these orders are worth Rs 6800 crore.

Also, with the latest Government of India initiative to provide higher SBFA funding to green-fuelled ships and hybrid vessels, further shipbuilding orders are expected to be received.

In order to to increase indigenous manufacturing, the SBFAP guidelines have been amended to include wind farm installation vessels and the construction of sophisticated dredgers as specialised vessels which are eligible to get higher financial assistance.

The SBFAP guidelines have been amended to include financial assistance of 30 per cent for vessels where main propulsion is achieved through green fuels such as methanol, ammonia, and hydrogen fuel cells.

The SBFAP guidelines have been amended to include financial assistance of 20 per cent for vessels with electric means of propulsion or vessels fitted with hybrid propulsion systems.