India to Offer ₹40 B Incentives to Revive Shipbreaking Industry
Credit notes for scrap value, east coast yard, and ₹250 billion maritime fund on the cards
- India to offer ₹40 billion incentives over 10 years to boost ship recycling.
- Credit notes equal to 40% of scrap value for shipowners scrapping in India.
- New east coast yard planned to lure business from Bangladesh.
- India held 33% of global shipbreaking share in 2023 vs Bangladesh’s 46%.
GG News Bureau
New Delhi, 16th Sept: India is preparing a ₹40 billion ($454 million) incentive package to reclaim its position in the global shipbreaking market, aiming to regain ground lost to Bangladesh and Pakistan, according to people familiar with the plan. The Cabinet is expected to clear the proposal by the end of September, with benefits spread over ten years starting 2026.
Under the scheme, ship owners scrapping vessels in India would receive a credit note worth about 40% of the ship’s scrap value. Valid for three years, the note could be used to buy India-built ships, combined with other credits, or even sold. Officials say the move will reinforce India’s share in the global ship recycling market, where it accounted for one-third of dismantled ships in 2023, behind Bangladesh’s 46%.
The Alang yard on Gujarat’s western coast—India’s primary shipbreaking hub handling 98% of domestic activity—has seen business erode as neighbouring Bangladesh and Pakistan leveraged cheaper labour. A new shipbreaking facility on the east coast is also under consideration to attract vessels away from Bangladesh.
The plan arrives as global scrapping revives after a slump triggered by Russia’s invasion of Ukraine, which prompted shipowners to keep older vessels running amid higher freight rates.
Additionally, Prime Minister Narendra Modi’s government is poised to approve a ₹250 billion maritime development fund this month to spur domestic shipbuilding and cut reliance on foreign-built vessels. Announced in the Union Budget for FY26, the fund complements the shipbreaking incentives to create an integrated maritime push.
