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Shipbuilding Revolution In India! Delhi Approves $8 Billion To Revitalize The Maritime Sector; Can India Cash In?
The Union Cabinet recently approved a ₹69,725-crore package ($8B) to revitalize India’s shipbuilding and maritime sector, and signalled more than just another reform measure.
It was a declaration of intent that India would no longer remain on the margins of global shipbuilding, but would step forward with scale, ambition, and capacity.
Our once-rich shipbuilding heritage had been the grounds for India to have talked about its maritime destiny; today, the government seems determined to equip the country with the infrastructure, incentives, and partnerships needed to make that destiny real.
According to the Press Information Bureau (PIB), the package includes an extension of the Shipbuilding Financial Assistance Scheme till 2036 with a corpus of ₹24,736 crore, a Maritime Development Fund with a ₹20,000-crore Maritime Investment Fund, and a Shipbuilding Development Scheme with an outlay of ₹19,989 crore to expand domestic shipbuilding capacity to 4.5 million gross tonnage.
These numbers may mean nothing in themselves, but in essence, they mean one thing, and that is, India is betting big on matching its intent with capacity.
A Change In Perception
As Sanjeev Sanyal, member of the Economic Advisory Council to the Prime Minister, candidly remarked in a recent Business Today interview, “No one believed we were serious.”
Shipbuilding in India has long suffered from precisely this perception problem. In my earlier article, I discussed the challenges we face. Despite India’s maritime tradition and coastline advantage, the industry remained constrained by limited capacity, thin financial support, and poor integration into global supply chains. The latest package attempts to break that cycle by signaling seriousness through both financial means and policy.
The government’s first task is to change those perceptions.
The Economic Times recently reported that the government has accorded infrastructure status to the building of large ships, a classification that will ease access to finance and reduce borrowing costs. For shipyards operating on thin margins and with long gestation projects, this relief is the difference between stagnation and expansion.
The Tamil Nadu Push
The biggest material manifestation of this intent is visible in Tamil Nadu. The state, with its massive coastline and proximity to shipping lanes, is positioning itself as India’s new maritime hub.
Last week, it was widely reported that Tamil Nadu has attracted nearly ₹30,000 crore ($3.5 billion) of investment for two global-scale commercial shipyards. One will be led by Cochin Shipyard Limited (CSL), which will invest ₹15,000 crore and generate over 10,000 jobs. The other, led by Mazagon Dock Shipbuilders Limited (MDL), will also involve an investment of ₹15,000 crore and is projected to create more than 45,000 jobs.
Both projects are transformational not only in scale but in ambition. CSL has already made its mark with the indigenous aircraft carrier INS Vikrant; its foray into commercial yards reflects a natural scaling up.
MDL, on the other hand, has traditionally been synonymous with naval construction, from submarines to destroyers. Its decision to step into global-scale commercial shipbuilding marks an important diversification, one that signals India’s readiness to play in the world’s big league.
Expanding Horizons Abroad
This outward push is not limited to the domestic front. India’s major shipyards are now looking overseas for both partnerships and footholds.
The Press Information Bureau recently announced that MDL is acquiring a controlling 51% stake in Colombo Dockyard PLC in Sri Lanka. Reuters and the Economic Times confirmed the deal, valued at roughly ₹452 crore, which will give MDL a strategic base in the Indian Ocean, and by extension, in a port ecosystem heavily influenced by Chinese investments.
This is significant. For the first time, an Indian shipyard will own and operate a foreign shipyard, creating synergies in ship repair, refit, and regional presence.
It is as much a strategic move as an industrial one. In many ways, it mirrors India’s broader geopolitical approach—offensive in capability, defensive in posture, and calibrated in execution.
Philippine coast guard personnel wave Indian flags as the Indian coast guard ship Samudra Paheredar (R) docks during a port call at the international port in Manila on March 25, 2024. (Photo by Ted ALJIBE / AFP)
Addressing the Capacity Question
One of the most important challenges is to address the ‘alignment of capacity with intent’. All these initiatives, including financial packages, infrastructure status, mega-shipyards, and overseas acquisitions, circle back to the fundamental challenge: capacity.
India’s maritime ambitions, whether in trade, defence, or geopolitical influence, have long outstripped its shipbuilding base. We may aspire to be the voice of the Global South and a key Indo-Pacific power, but without the ability to build, maintain, and repair ships at scale, that ambition risks remaining rhetoric.
Capacity, in this sense, is not just about tonnage but about credibility. When Indian shipyards can deliver large commercial vessels on time and at competitive costs, when they can attract foreign orders and execute them efficiently, when they can offer reliable maintenance to global shipping lines—that is when intent will match capability.
The new schemes are specifically designed to achieve this goal.
Linking Industry With Strategy
The link between shipbuilding and national strategy is hard to miss. As India seeks to increase its share of global manufacturing and trade, reliable maritime infrastructure becomes indispensable.
At the same time, the Navy’s push for indigenous platforms, from aircraft carriers to nuclear submarines, requires a robust shipbuilding ecosystem to provide not only hulls but also the broader industrial base of related industries, including steel, electronics, propulsion, and skilled manpower.
The shipbuilding thrust, therefore, serves a dual purpose: it powers economic growth through job creation and exports, while reinforcing national security by ensuring sovereign capability. In this, it mirrors the trajectory of other maritime powers.
South Korea, for example, built its shipbuilding base by first serving its own fleet and then scaling up to become a global leader.
China, too, utilized state support to develop massive capacities that now dominate global order books. India is attempting a similar leap, albeit later and with a different balance of market and state.
Jobs, Skills & Ecosystems
Equally important is the human dimension. The Tamil Nadu shipyards alone are projected to create 55,000 jobs, both direct and indirect.
Beyond numbers, this signals the emergence of a maritime skills ecosystem, comprising welders, engineers, designers, and supply chain managers, all feeding into a virtuous cycle of employment and expertise.
It also ensures that the Indian skilled workforce employed in the Gulf countries and elsewhere have the option to return and strengthen our shipbuilding ecosystem. When an industry of this scale takes root, its effects ripple across ancillary industries, including steel, paints, software, and electronics.
The PIB release also emphasised the role of the Maritime Development Fund in de-risking long-term investment. This is critical in ensuring that Indian private shipyards and ancillary suppliers do not face the stop-start cycles of the past but instead find stable financing and predictable demand.
There are several smaller shipyards in India that can be revitalized and scaled up to meet the domestic demand for smaller crafts, as well as export to the neighboring countries.
The Road Ahead
Of course, challenges remain.
Global competition is fierce, dominated by Korean and Chinese giants. Cost structures in India remain higher, productivity is still lower, and supply chains are not yet fully integrated.
Deliveries must meet timelines, and quality must meet international standards. But the difference today is that the government is providing the scaffolding of finance, policy, and infrastructure to allow industry to climb.
In a sense, India’s shipbuilding story is no longer just about potential—it is about execution. The ₹69,725-crore package is the government’s down payment on that execution.
The Tamil Nadu shipyards are its test projects. The Colombo Dockyard acquisition is its first outward step. And the infrastructure status for large ships is the enabler.
Conclusion: Matching Intent With Capability
For too long, India’s maritime narrative has been aspirational—of becoming a leading power, of shaping the Indo-Pacific order, of harnessing the blue economy.
What the new shipbuilding thrust attempts to do is translate that aspiration into steel and concrete, into docks and hulls, into jobs and skills.
The package, the projects, and the acquisitions are India’s answer. They declare that seriousness is not only directed at the domestic audience but also to the world.
And in the maritime world, capacity is credibility. India, finally, seems ready to build both. Indeed, we are experiencing exciting times in the maritime sector, and the times ahead, although challenging, will be rewarding.
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