Shipbuilding Financial Assistance Scheme (SBFAS)

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News: The Union Cabinet approved a ₹69,725 crore package to revitalise shipbuilding and maritime infrastructure, extending SBFAS and launching complementary funds and schemes for capacity, finance, and technology.

About Shipbuilding Financial Assistance Scheme (SBFAS)

Source – ET
About SBFAS
  • The SBFAS is part of the comprehensive package to strengthen India’s maritime ecosystem.
  • It provides direct financial assistance to shipbuilders and includes a Shipbreaking Credit Note.
  • It will be Overseen by a National Shipbuilding Mission for coordinated implementation.
Administered by
  • It is under the Ministry of Ports, Shipping and Waterways (MoPSW)
Total corpus
  • Extended with a total corpus of ₹24,736 crore.
  • Includes a Shipbreaking Credit Note allocation of ₹4,001 crore.
AimTo incentivize shipbuilding in India and strengthen domestic shipyard competitiveness for both domestic and export orders.
Time Period
  • Initially, it was for shipbuilding contracts signed from 2016 to 2026
  • Now it will be extended until 31 March 2036
Feature
  • It provides higher financial assistance for specialised vessels, (e.g., wind-farm installation vessels, sophisticated dredgers) beyond ₹40 crore cap for non-specialised vessels.
  • It offers 30% financial assistance for vessels using green fuels (Methanol/Ammonia/Hydrogen fuel cells).
  • It offers 20% financial assistance for vessels with electric or hybrid propulsion.

 Complementary financial assistance for shipbuilding

  • Maritime Development Fund (MDF): ₹25,000 crore long-term financing window.
    • Maritime Investment Fund: ₹20,000 crore with 49% Government participation.
    • Interest Incentivization Fund: ₹5,000 crore to lower effective cost of debt and improve project bankability.
  • Shipbuilding Development Scheme (SbDS): ₹19,989 crore for capacity and risk cover.
    • Capacity target: It will support mega shipbuilding clusters and infrastructure expansion.
    • Technology: To Establish India Ship Technology Centre under Indian Maritime University.
    • Risk coverage: It Includes insurance support for shipbuilding projects.
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