Tamil Nadu has announced the Shipbuilding Policy 2026, presenting a roadmap to develop large-scale shipbuilding infrastructure capable of producing high-capacity ocean vessels such as Very Large Crude Carriers (VLCCs).
The policy seeks to attract global shipyard projects and expand the state’s role in India’s maritime manufacturing landscape.
Under the policy, shipyard companies engaged in manufacturing, repair or maintenance of maritime structures will qualify for government assistance if they invest at least ₹1,000 crore and create 1,000 jobs.
Eligible projects can choose a Structured Package of Assistance that may include state equity participation, capital subsidy on eligible fixed assets, production-linked incentives or structured leasing of critical assets.
To implement the initiative, the state will establish a Special Purpose Vehicle under the State Industries Promotion Corporation of Tamil Nadu (SIPCOT). The SPV will support shipbuilding clusters by enabling coastal infrastructure, facilitating land-based facilities, and assisting with project financing.
The government may also participate as a minority equity partner, with initial support provided as milestone-linked funding that can convert into equity of up to 49% once project targets are met.
A key feature of the policy is the buy-and-lease-back framework for shipyard assets. Under this model, the state may acquire critical operational assets and lease them back to shipbuilders. Support may cover assets up to ₹6,000 crore or 20% of total project cost, whichever is lower. The government’s exposure will be capped at ₹1,000 crore annually, with unused allocations carried forward. Lease pricing will be based on depreciation, asset life and mutually agreed return levels.
The policy also promotes shipbuilding component manufacturers. Firms investing ₹50 crore or more, supplying at least 50% of production to shipyards and creating 100 jobs will qualify for incentives. Investments of ₹50 crore to ₹499 crore will be classified as large projects, while investments above ₹500 crore will follow norms under the Tamil Nadu Industrial Policy 2021.
The policy complements the central government’s broader push to strengthen India’s shipbuilding capabilities through a ₹69,725 crore support programme, which includes a ₹25,000 crore Maritime Development Fund and a ₹24,736 crore Shipbuilding Financial Assistance Scheme.
Although maritime transport accounts for about 95% of India’s trade by volume and nearly 70% by value, the country’s shipbuilding industry remains relatively small, with an estimated size of $0.88–$1.12 billion (₹7,450–₹9,520 crore) and a global market share of roughly 0.06%.
India’s merchant fleet has expanded from 1,429 vessels with 12.75 million gross tonnages in 2019 to 1,526 vessels with 13.74 million gross tonnages in 2023. However, global shipbuilding remains concentrated in a few countries, with China accounting for around 51% of the market.
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The Shipbuilding Policy 2026 will remain in force for 5 years from the date of notification and may be revised depending on industry requirements, as Tamil Nadu seeks to attract large shipyard investments and strengthen its position in the global maritime manufacturing sector.
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Published on: Mar 6, 2026, 12:32 PM IST
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