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The government has granted infrastructure status to large commercial ships, adding them to the harmonised master list of infrastructure under transport and logistics. Vessels of 10,000 gross tonnage or more, and those above 1,500 gross tonnage if built and flagged in India, now qualify. The move, announced in Budget 2025-26, allows shipping firms easier access to overseas borrowing, tax concessions, and funding support from institutions like IIFCL. Alongside, a Maritime Development Fund worth INR 25,000 crore will aid ship financing, targeting INR 1.5 lakh crore in investments by 2030. The policy aims to boost Indian-flagged ships' global share and strengthen domestic shipbuilding.
The government has extended infrastructure status to large commercial ships by including them in the harmonised master list of infrastructure under the transport and logistics category. Commercial vessels of 10,000 gross tonnage or more, owned and flagged in India, are now eligible for this status. Similarly, vessels with a gross tonnage of 1,500 or more, provided they are built in India and remain under Indian ownership and flag, have also been granted the same recognition. Advertisement
The Finance Ministry issued the notification through a gazette earlier this week, following the provision announced in the Union Budget 2025-26. This inclusion enables shipping companies to access benefits such as easier overseas borrowing, tax concessions, funding through tax-free bonds, and credit from institutions like the India Infrastructure Finance Company Limited (IIFCL) and specialised debt funds.
Infrastructure recognition of this nature is not new; in 2016, the government had included shipyards in the harmonised master list of infrastructure sub-sectors. The master list, which has now expanded to 38 sub-sectors under five broad categories-transport, energy, water and sanitation, communication, and social and commercial infrastructure-follows specific criteria for inclusion. Any sector or sub-sector considered for this recognition must exhibit six characteristics, including high sunk costs, natural monopoly, and the presence of externalities.
Officials highlighted that shipping companies in India often face financing challenges, limiting growth in tonnage. To address this, the Budget had also proposed the creation of a Maritime Development Fund (MDF) worth INR 25,000 crore. This initiative is expected to significantly ease ship acquisition financing and attract investments of around INR 1.5 lakh crore in the sector by 2030. It further seeks to enhance the share of Indian-flagged ships in global cargo volumes to nearly 20 per cent by 2047.
By easing access to capital and tax benefits, the government intends to encourage investment in ship acquisition and construction, thereby improving competitiveness. Supported by the Maritime Development Fund, this policy aims to expand Indian-flagged shipping presence globally and ensure steady growth for the domestic shipbuilding industry in the years ahead.
Source - PTI
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