Self Reliance in Shipping

Source: The post Self Reliance in Shipping has been created, based on the article “India has a viable voyage plan to acquire self-reliance in shipping” published in “Live Mint” on 29 September 2025. Self Reliance in Shipping.

UPSC Syllabus: GS-2- Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Context: India relies heavily on foreign shipping, spending around USD 75 billion annually nearly equivalent to its defence budget. This overdependence on foreign ships, which handle about 95% of India’s export-import trade, highlights the urgent need for self-reliance in shipping.

Why Self-Reliance in Shipping is Needed

1. High Foreign Exchange Outflow: India spends nearly USD 75 billion annually on foreign shipping services, reducing this dependency will help conserve foreign exchange and strengthen the domestic economy.
2. Strategic Autonomy and National Security: In times of international crises or conflicts, a strong domestic shipping fleet ensures uninterrupted supply chains for energy, food, and defence cargo. It also helps to stabilize shipping costs and improve trade competitiveness.
3. Boosting Domestic Industry and Employment: Building and operating Indian ships creates large-scale employment in shipyards, ancillary industries, ports, and logistics sectors. It also develops technological expertise and a skilled workforce in maritime engineering and operations.
4. Supporting Make in India and Atmanirbhar Bharat: Self-reliance in shipping stimulates domestic shipbuilding, port infrastructure, and related industries. This aligns with the government’s goal of increasing India’s share in global maritime trade to 30% by 2047.
5. Compliance with Global Environmental Norms: Developing indigenous capacity allows India to design ships that comply with international sustainability and emission standards. It also provides control over adopting green technologies suited to India’s needs.
6. Enhancing India’s Global Maritime Influence: A robust Indian-flagged fleet increases India’s bargaining power in international maritime forums and strengthens its position in global supply chains.

Government Initiatives for Self-Reliance in Shipping

1. Shipbuilding Financial Assistance Scheme (SFAS): The Shipbuilding Financial Assistance Scheme (SFAS) will provide financial assistance to shipyards and encourage the establishment of new shipbuilding facilities.
2. Maritime Development Fund (MDF): The Maritime Development Fund (MDF) has been approved to provide long-term financing support for ship acquisition and port development.
3. Shipbuilding Credit Guarantee Scheme (SCGS): The government has allocated ₹4,000 crore under the Shipbuilding Credit Guarantee Scheme (SCGS) to guarantee up to 40% of the ship’s value for buyers of ships built in India.
4. Shipbuilding Development Scheme (SbDS): The Shipbuilding Development Scheme (SbDS) has been launched to expand domestic shipbuilding capacity to 4.5 million gross tonnage annually and support mega shipbuilding clusters and infrastructure expansion.
5. The government plans to establish the India Ship Technology Centre under the Indian Maritime University to develop skills, research, and shipbuilding technology.
6. The government’s recent policy interventions, as highlighted under the Samudra ke Samriddhi programme, aim to transform India into a major global maritime player

Supportive Measures & Policy Framework

1. Harmonized Master List (HML): The Harmonized Master List (HML) now includes Indian-owned and Indian-flagged ships which are built in India and bear the Indian flag.
2. The Reserve Bank of India (RBI) Project Finance Directions, 2025, will provide flexible lending terms, enhanced limits for loans from banks, flexibility in financing, and restructuring of existing loans for the shipping sector.
3. Financing Access: Infrastructure funds such as NaBFID, PFC, REC and the Sagarmala Development Finance Corporation will be opened for Indian shipping companies to access finance for fleet expansion and ship acquisition.
4. Green Shipping Push: The Harit Nauka-Green Transition Guidelines for Inland Vessels will promote clean fuel-powered vessels and provide a structured plan for greener inland shipping.
5. Technology and Skills Development: Proposed India Ship Technology Centre under Indian Maritime University for R&D and training.

Potential Impact

1. Reduced Dependence on Foreign Shipping: These initiatives will reduce India’s dependence on foreign shipping and help retain freight earnings within the country.
2. Boost to Employment and Shipbuilding Industry: They will boost employment opportunities and strengthen the Indian shipbuilding and allied industries.
3. Environmental Compliance: They will enable Indian ships to comply with international sustainability and environmental standards, reducing risks from global emission regulations.
4. Strategic Maritime Autonomy: They will enhance India’s strategic maritime autonomy and global competitiveness, aligning with the Atmanirbhar Bharat vision.

Challenges

1. The shipbuilding industry is highly capital-intensive and has long gestation periods, which may discourage private investment.
2. Compliance with evolving international environmental and safety standards requires continuous technological upgrades.
3. India needs to develop skilled manpower and advanced infrastructure to compete with established global shipbuilding hubs.
4. Global competition and fluctuating freight markets can affect the long-term viability of Indian shipping ventures.

Way Forward

1. The government should ensure timely execution of announced schemes and quick disbursal of funds to shipyards.
2. India should develop a national shipbuilding cluster policy with clear incentives for innovation, research, and skill development.
3. Partnerships with global shipbuilders should be promoted for technology transfer and green shipbuilding expertise.
4. A supportive legal and regulatory framework should be created to attract private sector investment in shipbuilding and ship operation.

Conclusion: India’s multi-pronged approach combining financial incentives, regulatory reforms, green shipping norms, and domestic manufacturing sets a strong foundation to achieve the nation’s vision of capturing 30% of global maritime trade by 2047. Effective implementation of these initiatives can transform India from a shipping-dependent nation to a maritime power.

Question: India has unveiled several initiatives to achieve self-reliance in shipping. Discuss the measures taken and their potential impact on India’s maritime trade.