Union Cabinet approved 4000 crore rupees proposal for shipbuilding industry


Who: Union Cabinet
What: Approved 4000 crore rupees proposal for shipbuilding industry
When: 9 December 2015

The Union Cabinet on 9 December 2015 approved a 4000 crore rupees proposal for introducing measures to encourage Shipbuilding and Ship Repair Industry in India.


The proposal will give a big boost to the shipbuilding and ship repair industry and will facilitate the Make in India initiative of the Union Government.

Highlights of the proposal
• To counter the cost-disadvantages, the government will grant a financial assistance of 20 percent of the contract price or the fair price, whichever is lower following the delivery of the ship.
• The assistance will be reduced by 3 percent in every three years and will be given for all types of ships.
• This policy will be in force for ten years. The implementation of this policy would require budgetary support of 4000 crore rupees over ten years.
• The proposals also include grant of a Right of First Refusal for Indian shipyards for government purchases; tax incentives and grant of infrastructure status for shipbuilding and ship repair industry.

Shipbuilding and Ship Repair Industry in India
• The shipbuilding industry has the same impact as infrastructure sector due to higher multiplier effect on investment and turnover and high employment potential due to multiplier effect.
• The shipbuilding industry is strategically important industry due to role in energy security and maritime defense.
• It also plays a role in developing heavy engineering industry.