India Issues First Ship Recycling Credit Note to Bella Shipping for Scrapping Capesize Vessel
In a significant milestone for India’s maritime sector, the government has issued the country’s first Ship Recycling Credit Note to Bella Shipping India Pvt Ltd after the environmentally compliant recycling of a Capesize bulk carrier, marking the operational launch of a scheme designed to link ship recycling with domestic shipbuilding.
The credit note, valued at ₹29.81 crore, has been granted under the Ship Recycling Credit Note Scheme and will remain valid until May 2029. The initiative is aimed at encouraging shipowners to recycle vessels at certified Indian yards while simultaneously boosting demand for ships built in India.
The scheme forms part of the government’s broader maritime development strategy and seeks to create a circular ecosystem where the end-of-life value of ships contributes to the construction of new vessels. Under the mechanism, shipowners who recycle vessels at Hong Kong International Convention (HKC)-compliant ship recycling facilities in India become eligible for a credit note equivalent to 40 per cent of the vessel’s scrap value. The credit can subsequently be used when placing orders for new ships at Indian shipyards.
Officials said the issuance of the first credit note demonstrates the government’s commitment to strengthening India’s position as a global hub for both ship recycling and shipbuilding. The policy is expected to encourage fleet renewal while ensuring that recycling activities adhere to internationally accepted environmental and safety standards.
India is already one of the world’s leading destinations for ship recycling, with the Alang ship recycling yard in Gujarat accounting for a major share of global vessel dismantling activity. Over the past few years, several recycling facilities in Alang have upgraded their infrastructure and procedures to comply with the Hong Kong Convention, which sets standards for safe and environmentally sound ship recycling. The new incentive is expected to further enhance the competitiveness of these facilities.
Industry experts believe the scheme could play an important role in supporting India’s ambitions to develop a stronger domestic shipbuilding industry. By linking recycling incentives to new vessel construction, the government aims to retain more value within the maritime sector and stimulate investment in local shipyards. The measure also supports the country’s “Make in India” initiative and broader goals of enhancing maritime self-reliance.
According to the scheme guidelines, the credit notes are transferable and can be sold if the original shipowner does not intend to use them. Multiple credit notes may also be combined and utilized toward eligible shipbuilding projects, providing additional flexibility to industry participants. The credit can be used to offset a portion of the contract value of a new vessel built at a registered Indian shipyard.
The launch of the scheme comes at a time when India is seeking to expand its maritime infrastructure and capture a larger share of the global shipbuilding market. Policymakers view the integration of ship recycling and shipbuilding as a strategic step toward creating a sustainable maritime value chain, generating employment, and promoting resource efficiency through a circular economy model.
With Bella Shipping becoming the first beneficiary, industry stakeholders will be closely watching how widely the scheme is adopted and whether it succeeds in attracting additional vessel recycling business to India while simultaneously driving new shipbuilding orders. Maritime analysts say the initiative has the potential to become a key policy instrument in strengthening India’s long-term maritime competitiveness and green shipping credentials.
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