
New Delhi,1st of February, 2025 : The Union Budget has placed strong impetus to realise the huge potential of India’s shipping sector. The forward-looking document aims at further enabling India’s shipbuilding industry with spurring & innovative initiatives to drive investment, generate income for the economy, train and employ human capital and create value for the future of the country. The Union Minister of Ports, Shipping & Waterways, Sarbananda Sonowal welcomed the budget and termed it progressive policy statement towards realising the vision of PM Narendra Modi of a Viksit Bharat by 2047.
On the occasion, the Union Minister of Ports, Shipping & Waterways,Sarbananda Sonowal said, “I welcome the Union Budget presented in Parliament today.This budget serves as a catalyst for economic growth, aligning with Prime Minister Narendra Modi ji’s vision o fa‘Viksit Bharat, Atmanirbhar Bharat.’ congratulate Finance Minister Nirmala Sitharaman ji for presenting a forward-looking budget that embodies the principles of good governance, progressive reforms, and innovative policy making. This budget not only strengthens business and trade sentiment but also acts as a spring board for economic expansion,capacity building, and solution-driven holistic development of the society and growth of the economy.By unlocking value and enriching national assets, it lays the found ation for sustained progress and people centric development. The budget aims to generate wealth, drive welfare initiatives, and foster public participation in nation-building. It safeguards the interests of future generations while elevating the quality of life for the people of Bharat.”
The Union Budget proposes to set up Maritime Development Fund (MDF) to support India’s Maritime sector by providing financial assistance, via equity or debt securities. The initial corpus of the fund is pegged at ₹25,000 Crores – where the Government contribution will be 49%. The remaining balance will be contributed by Major port authorities, other government entities, Central PSEs, Financial Institutions as well as private sector. This fund will directly benefit in financing for ship acquisition. It aims at boosting Indian flagged ships share in the global cargo volume upto 20% by 2047. Further, indigenous fleet will reduce dependability of foreign ships, improve Balance of Payment and secure Strategic interests of the country. By 2030, MDF is aiming at generating upto ₹1.5 lakh crore investment in the shipping sector.
Speaking on the initiatives for spurring the India’s Maritime sector, the Shipping Minister, Sarbananda Sonowal said, “It is reassuring to see that the budget ary initiatives for India’s marine sector are focusedon unlocking its vast potential and enhancing existing assets through upgrades, modernisation, and automation. A key highlight is our ministry’s development of new shipbuilding clusters of 1.0 to 1.2 Million Gross Tonnage (GT) each.This strategic push is crucial in realising India’s vision of becoming a $30trillioneconomyby2047. By leveraging the Public-Private Partnership (PPP) model ,the scheme is designed to attract private investment, promote modern is ation, and advance green technologies.These efforts will enhance India’s global competitiveness,drive sustainable growth,and solidify its position as a leading Global Maritime Hub. The new incentives are projected to generate 11 lakhs of direct or indirect employment.”
The Union Budget provided a shot-in-the-arm to India’s domestic shipbuilding industry after it announced new mega shipbuilding clusters in the country. This scheme will provide direct capital support in the form of creating the breakwater along with capital dredging. It also proposes a 10 year rent holiday for the land, if not provided at a nominal rate. Investment is also designed to support creation of trunk infra like roads, utilities, sewage treatment among others. The proposed allocation of ₹6,100 crore aims to support India’s existing shipyards in upgrading, modernising, and automating their operations, enhancing efficiency, utilisation, and overall output.
The Union Budget has also extended the Shipbuilding Financial Assistance Policy (SBFAP) 2.0, aimed at providing direct financial subsidies to Indian shipyards. This initiative seeks to help in securing orders by offsetting operational cost disadvantages, thereby strengthening the domestic shipbuilding industry. To be financed via Budgetary support, the total outlay of the scheme is ₹18,090 Crores.
Another innovative scheme announced in the budget is the Ship breaking Credit note. This scheme incentivises Ship Scrapping by issuing a Credit Note of 40% of the scrap value which can be reimbursed to buy new Made In India ships.
The Union Budget and the Northeast
The Union Budget 2025-26 has introduced key reforms and enhanced allocations to support nutrition and regional connectivity in the Northeast and across India, reinforcing the government’s commitment to inclusive growth. Under the Saksham Anganwadi and Poshan 2.0 initiative, the government will provide nutritional assistance to over 8 crore children, 1 crore pregnant and lactating mothers, and nearly 20 lakh adolescent girls in the Northeast. The revised expenditure framework aims to strengthen nutritional support and improve the overall well-being of beneficiaries, ensuring better health outcomes in the region. In a significant boost to regional air connectivity, the UDAN scheme will be expanded with 120 new destinations, enhancing accessibility, particularly in hilly, aspirational, and remote areas of the Northeast. Additionally, a revamped UDAN initiative has been announced to facilitate the movement of 4 crore passengers over the next decade. This will include upgrading helipads and small airports, further integrating the region with the national aviation network. These initiatives underscore the government’s dedication to the holistic development of the Northeast, fostering socio-economic progress, improved mobility, and enhanced access to essential services.
Sarbananda Sonowal said, ”The Union Budget 2025-26 reflects the strong and welfare-oriented vision of the NDA government under the leadership of Hon’ble Prime Minister Shri Narendra Modi. This budget will play a crucial role in accelerating India’s journey towards self-reliance and comprehensive development. The progressive roadmap outlined in this budget will empower 140 crore Indians with new opportunities and prosperity. By placing significant emphasis on the four key growth engines—agriculture, MSMEs, investment, and exports—this budget effectively addresses the aspirations of all sections of society, ensuring inclusive and sustainable development. The Modi government has stood firmly with the middle class, as reflected in the provision that individuals earning up to ₹12 lakh annually will not be required to pay income tax. I extend my heartfelt gratitude and appreciation to Hon’ble Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman for presenting a comprehensive, welfare-driven, and visionary budget that will accelerate the foundation of a developed and prosperous India.”
Inland Waterways and the Northeast
Recognising the strategic importance of inland waterways, the government has also extended the Tonnage Tax Scheme to inland vessels, including those operating on National Waterway 2 (NW-2), which runs through the Brahmaputra River. This move will incentivise cargo movement in the Northeast, as vessels will now be taxed based on their capacity rather than profits, making inland water transport a financially viable and attractive investment. By promoting greater private sector participation in inland shipping, this policy is set to enhance trade efficiency, reduce logistics costs, and unlock the immense potential of NW-2 as a key economic corridor for the region. These initiatives underscore the government’s dedication to the holistic development of the Northeast, fostering socio-economic progress, improved mobility, and enhanced access to essential services while boosting sustainable transport and trade connectivity.
Speaking on the positive impact of budget for the Northeast, Sarbananda Sonowal said, “The Union Budget 2025-26 paves the way for accelerated growth in the Northeast by enhancing connectivity, boosting trade through inland waterways, and strengthening social welfare initiatives, ensuring inclusive and sustainable development across the region. The extension of the Tonnage Tax Scheme to inland vessels is a game-changer for Assam’s economy. By making cargo movement on National Waterway 2 more financially viable, this initiative will unlock new trade opportunities, attract investment in inland shipping, and strengthen Assam’s position as a logistics hub for the Northeast. This will not only reduce transportation costs but also create jobs and accelerate economic growth in the region. The Budget 2025-26 emphasises healthcare in the Northeast by strengthening medical infrastructure, expanding access to healthcare services, and enhancing specialised facilities in remote areas. In education, the budget focuses on improving digital learning, establishing new institutions, and expanding skill development programmes to equip the region’s youth for future opportunities.”
Adding further on Inland waterways sector, Sarbananda Sonowal said, “The extension of the Tonnage Tax Scheme to inland vessels marks a significant milestone for Assam’s economic landscape as well as for the Northeast region. By enhancing the financial viability of cargo transport along National Waterway 2 (NW2), the initiative is set to drive new trade prospects, attract investment in inland shipping, and solidify Assam’s role as a key logistics gateway for the Northeast. Lower transportation costs, coupled with increased employment opportunities, will contribute to the region’s overall economic expansion. Furthermore, a strong emphasis on workforce training and skill development will equip professionals with expertise in advanced maritime technologies, automation, and sustainable shipbuilding. This holistic approach will not only strengthen the inland waterways sector but also establish it as an efficient alternative to ease congestion in conventional transport networks”
Highlighting the need to develop trained professionals in the sector, the budget allocated specific funds for training and development of human resources to leverage India’s position as a global leader in maritime human capital. The budget provided for Shipbuilding Capability Development Centres (SCDC) is aimed at propping up the platform for the development of innovative ship design and engineering solutions as well as testing & evaluation of Shipping projects. An outlay of ₹1200 crores has been earmarked for this. Additional provision of ₹1040 crores have been announced for providing capital and operational assistance to the existing and upcoming shipbuilding design and training centres from the private sector. A budgetary allocation of ₹610 crores is proposed for a support scheme for Research & Development (R&D) and innovation in ship technology. This initiative will foster the development of new and improved shipbuilding technologies.
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