Government of India Notifies Operational Guidelines for Shipbuilding Financial Assistance and Development Schemes Till 2036:

The Centre has notified operational guidelines for SBFAS and SbDS, aiming to boost India’s shipbuilding sector with support valid till 2036..

The Union government has formally notified the operational guidelines for two flagship initiatives aimed at strengthening India’s shipbuilding ecosystem , 1) the Shipbuilding Financial Assistance Scheme (SBFAS) and 2) the Shipbuilding Development Scheme (SbDS).

Both schemes will remain valid until March 31, 2036, with an in-principle extension envisaged up to 2047, aligning with India’s long-term maritime and industrial growth roadmap.
The notification marks a significant policy step towards enhancing domestic shipbuilding capacity, improving global competitiveness of Indian shipyards, and reducing dependence on imports in the maritime sector..

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Boost to India’s Shipbuilding Ambitions.

India’s shipbuilding industry has long faced challenges such as high capital costs, competition from heavily subsidised global shipyards, and limited access to long-term financing. The newly notified guidelines aim to address these structural issues while supporting the government’s broader objectives under Atmanirbhar Bharat, Make in India, and the Maritime India Vision 2030.
By providing financial assistance, infrastructure support, and capacity-building measures, the schemes are expected to encourage both public and private investment in shipbuilding and associated ancillary industries..

Shipbuilding Financial Assistance Scheme (SBFAS):

Key Features.

The Shipbuilding Financial Assistance Scheme is designed to bridge the cost disadvantage faced by Indian shipyards in comparison to their international counterparts.

Key objectives include:
Enhancing the global competitiveness of Indian shipbuilders
Encouraging domestic construction of vessels
Supporting employment generation and skill development in the maritime sector
Under the scheme:
Financial assistance is provided as a percentage of the contract price of eligible ships built in India
The assistance is structured to gradually taper over time, incentivising efficiency and technological advancement
Both government-owned and private shipyards are eligible, subject to compliance with prescribed norms
The guidelines lay down detailed eligibility criteria, claim procedures, verification mechanisms, and timelines to ensure transparency and effective implementation.

Shipbuilding Development Scheme (SbDS): Focus on Infrastructure and Capability:

The Shipbuilding Development Scheme complements SBFAS by focusing on long-term capacity creation rather than project-specific support.
Key focus areas include:
Modernisation and expansion of shipyard infrastructure
Development of ship repair and maintenance facilities
Adoption of advanced shipbuilding technologies and digital systems
Strengthening of the shipbuilding supply chain, including MSMEs.

The scheme is expected to play a crucial role in enabling Indian shipyards to build larger, more complex, and technologically advanced vessels, including green and energy-efficient ships.

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Long-Term Policy Certainty Till 2036 and Beyond.

One of the most significant aspects of the notification is the long validity period till March 31, 2036, with an in-principle extension up to 2047. This long-term policy horizon provides much-needed certainty to investors, lenders, and shipyard operators, allowing them to plan capital-intensive projects with confidence.
Industry stakeholders have consistently highlighted that shipbuilding requires long gestation periods, and policy continuity is critical to attract sustained investment. The extended timeframe is expected to improve India’s attractiveness as a shipbuilding destination in the Asia-Pacific region.

Expected Impact on the Maritime Economy.

The implementation of SBFAS and SbDS is expected to:
Increase domestic shipbuilding orders
Reduce vessel import dependence
Generate skilled employment across coastal states
Strengthen India’s maritime logistics and defence preparedness
Support ancillary industries such as steel, engineering, electronics, and marine equipment.

Over time, these schemes could help India move up the global shipbuilding value chain and establish itself as a competitive alternative to established shipbuilding hubs.

Conclusion:

With the notification of operational guidelines for the Shipbuilding Financial Assistance Scheme and the Shipbuilding Development Scheme, the Centre has reinforced its commitment to building a resilient and globally competitive shipbuilding industry. The long-term validity of these schemes underscores a strategic vision aimed at transforming India into a major maritime manufacturing hub by the middle of the century.

As implementation gathers pace, the effectiveness of these schemes will be closely watched by industry participants, policymakers, and global investors alike.