Budget 2025: Major Boost for India`s Shipbuilding & Maritime Sector
Union Budget 2025: Major Initiatives to Strengthen India's Maritime Sector
In a significant move to bolster India's maritime industry, Finance Minister Nirmala Sitharaman, in her Union Budget 2025 speech, announced a series of measures aimed at enhancing the shipbuilding sector and the country's maritime infrastructure. These initiatives are designed to support the shipbuilding industry and promote India's position as a global maritime hub.
Key Highlights of the Maritime Sector Announcements:
Maritime Development Fund with ?25,000 Crore Corpus:
The government introduced the creation of a Maritime Development Fund (MDF) with a corpus of ?25,000 crore. This fund will provide long-term and low-cost financial support for indigenous shipbuilding and other blue water infrastructure projects. The government will contribute up to 49% to the fund and mobilize the rest from the private sector. The MDF aims to offer various forms of financial support, including debt, equity, viability gap funding (VGF), and buyer credit.
Extension of Basic Customs Duty Exemption for Ship Components:
To further support the shipbuilding industry, the government announced the extension of the exemption from basic customs duty on ship components for another 10 years. This move is expected to reduce production costs for domestic shipbuilders, making them more competitive globally.
Shipbreaking Credit Note Policy:
The government introduced a shipbreaking credit note policy, similar to the vehicle scrappage scheme for cars. Under this policy, 40% of the scrap value of a vessel recycled at an Indian facility will be reimbursed through a credit note redeemable against the purchase of a new vessel in India. This initiative aims to promote sustainable practices in ship recycling and encourage the renewal of the domestic fleet.
Boost to Port Development and Connectivity:
The Budget emphasized improving India’s port infrastructure. With increased investments in port development, the government aims to enhance the logistics and shipping network, improving connectivity between domestic and international markets. The development of new ports and the modernization of existing ones will help boost India's cargo handling capacity and attract more shipping lines, further strengthening India's role in global maritime trade.
Conclusion:
The maritime sector announcements in Budget 2025 signal a transformational shift for India's shipbuilding and maritime infrastructure. By establishing the Maritime Development Fund, extending customs duty exemptions, and introducing the shipbreaking credit note policy, the government is laying the groundwork for a robust, self-sustaining maritime economy. These efforts will contribute to job creation and economic growth and position India as a key player in the global maritime industry. As the maritime sector receives increased attention and investment, the coming years are poised to see significant advancements in the nation's shipping, logistics, and shipbuilding capabilities.
