Budget 2025: A Game Changer for India’s Maritime Industry
The Indian government has unveiled the Budget 2025, placing a strong emphasis on the maritime sector to enhance shipbuilding, infrastructure development, and inland water transportation. Recognizing the potential of the maritime industry as a driver of economic growth, the government has introduced a series of policies and financial support mechanisms to bolster the sector.
Maritime Development Fund: A Major Boost for the Sector
One of the most significant announcements in the Budget 2025 is the establishment of a Maritime Development Fund (MDF) with a substantial corpus of ₹25,000 crore. This fund aims to provide long-term financing for the maritime industry, ensuring stability and growth in the sector. The government has committed up to 49% of the fund’s contributions, while the remaining amount will be mobilized from ports and private sector investments. This move is expected to facilitate modernization, expansion, and technological advancements in India’s maritime infrastructure.
Key Highlights of the Maritime Industry Budget Allocations
1. Extension of Basic Customs Duty Exemption
To further support the shipbuilding industry, the government has extended the basic customs duty exemption on raw materials, components, consumables, and parts used in ship manufacturing. This exemption will now be available for another 10 years, reducing the cost burden on shipbuilders and making Indian-made ships more competitive in the global market.
2. Revamping the Shipbuilding Financial Assistance Policy
The government has announced the revamping of the Shipbuilding Financial Assistance Policy to address cost disadvantages faced by Indian shipbuilders. A key feature of this revamp includes the introduction of credit notes for shipbreaking in Indian yards. This initiative aligns with the principles of a circular economy, ensuring that shipbreaking leads to the reuse of valuable materials while promoting sustainable practices in the industry.
3. Establishment of Shipbuilding Clusters
To enhance the shipbuilding ecosystem in India, the Budget 2025 proposes the establishment of shipbuilding clusters. These clusters will focus on:
- Expanding the range and capacity of ships manufactured in India.
- Infrastructure development to support ship construction, maintenance, and repair.
- Skill enhancement programs to train the workforce in cutting-edge shipbuilding technologies.
- Incorporation of advanced technology to improve efficiency, safety, and sustainability in shipbuilding processes.
4. Maritime Infrastructure Development
A significant allocation has been made towards maritime infrastructure development, which includes the expansion and modernization of ports and waterways. The focus areas under this initiative are:
- Enhancing port connectivity to improve logistics efficiency.
- Development of multi-modal transport hubs to facilitate seamless cargo movement.
- Expansion of coastal shipping and inland waterway networks to decongest roads and railways.
- Upgrading existing port facilities with smart technologies and automation for better operational efficiency.
A Boon for Inland Vessel Operators and GP Ratings
The Budget 2025 has also brought good news for inland vessel (IV) operators and jobless General Purpose (GP) Ratings, offering new opportunities for employment and career growth.
1. Expansion of the Tonnage Tax Scheme to Inland Vessels
The government has extended the tonnage tax scheme to inland vessels to promote inland water transportation and attract investments in the sector. This move is expected to make inland shipping more financially viable, ensuring sustained growth in the industry. The amendment will come into effect from April 1, 2026, applying to assessment years 2026-27 and beyond.
2. Inland Vessel Eligibility under the Tonnage Tax Scheme
As per the Inland Vessels Act, 2021, inland vessels that are registered under this Act will be eligible for the tonnage tax scheme. This alignment provides clarity and legal backing for vessel operators, encouraging them to invest in and expand their fleet.
Expected Impact on the Maritime Industry
These budgetary measures are expected to transform India’s maritime landscape by:
- Increasing India’s competitiveness in the global shipbuilding market.
- Attracting private investment and fostering public-private partnerships in maritime infrastructure.
- Boosting employment in shipyards, ports, and inland water transport.
- Promoting sustainability through efficient ship recycling and green shipping initiatives.
- Reducing logistics costs by shifting cargo transportation from roads and railways to waterways.
The Budget 2025 has made clear that the government views the maritime industry as a key driver of economic growth and development. With long-term financial support, tax incentives, and infrastructure investments, India is poised to become a major player in the global maritime sector. The initiatives will not only strengthen domestic capabilities but also create new business and job opportunities for thousands of Indians connected to this industry.
