The Union Budget, presented by the Union Finance Minister Nirmala Sitharaman on 01 February 2025 has provided significant impetus to the promotion of Shipping Sector in the country.
For long-term financing for the maritime industry, the Finance Minister has proposed to set up a Maritime Development Fund with a corpus of Rs 25,000 crore.
This corpus will be for distributed support and promoting competition in the maritime industry. The fund will have up to 49 per cent contribution by the Government, and the balance will be mobilized from ports and private sector.
In her Budget speech, the Finance Minister said: 'The Shipbuilding Financial Assistance Policy will be revamped to address cost disadvantages. This will also include credit notes for shipbreaking in Indian yards to promote the circular economy.
Large ships above a specified size will be included in the infrastructure harmonized master list (HML).
Shipbuilding Clusters will be facilitated to increase the range, categories and capacity of ships. This will include additional infrastructure facilities, skilling and technology to develop the entire ecosystem.'
She further announced: Considering that shipbuilding has a long gestation period, I propose to continue the exemption of BCD on raw materials, components, consumables or parts for the manufacture of ships for another ten years. I also propose the same dispensation for ship breaking to make it more competitive.'
India is currently ranked 22nd on shipbuilding and presently has less than a 1% share of the global market, which is dominated by China, South Korea and Japan.
The country ranks 18th on ship ownership, with a fleet size of around 1,550 registered vessels and carrying capacity of 13.5 million gross tonnage (GT).
Under its 'Vision 2047' plan, the government wants to make India one of the five biggest ship owners globally, with 100 million GT by 2047. It also plans to expand shipbuilding in the country and be among the top five shipbuilders by 2047, with a production capacity of 4.5 million gross tonnage per annum (GTPA), from just 0.1 million GTPA at present.
Despite these positive announcements, stocks belonging to the Shipping Sector, however, came under significant selling pressure.
Mazagon Dock Shipbuilders (down 4.83%), Great Eastern Shipping Company (down 6.06%), Cochin Shipyard (down 4.55%), Shipping Corporation of India (down 5.30%), Seamec (down 2.85%), Transworld Shipping Lines (down 4.66%) edged lower.
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