CHENNAI: The Tamil Nadu government on Wednesday unveiled its Shipbuilding Policy 2026, introducing a capital subsidy and incentive framework, backed by a special purpose vehicle (SPV), to attract global shipyards and position the state as a hub for shipbuilding.
Unveiled by Chief Minister M K Stalin at the secretariat, the five-year policy seeks to build large, technologically advanced and sustainable shipyards capable of producing high-value ocean-going vessels, including Very Large Crude Carriers.
The state will partner with investing shipyards to develop critical infrastructure. Through a designated government entity, it will purchase key shipyard assets - excluding land - classified as critical infrastructure, with support capped at Rs 6,000 crore or 20% of total project cost, whichever is lower.
These assets will be leased back to shipyards under a structure comprising fixed and variable payments, designed to provide reasonable returns to both investors and the state. Annual outlay under this model will be capped at Rs 1,000 crore, with unutilised amounts carried forward.
Industries Minister T R B Rajaa said the policy was designed to address the sector’s high upfront costs while creating long-term coastal industrial capacity.
“The policy introduces structured incentives to attract global shipyards and marine manufacturers. Equity participation, asset leasing, capital support and production-linked incentives will encourage long-term investment in shipbuilding, marine engineering and related manufacturing,” the minister said.
Shipyards committing Rs 12,000 crore or more and employing at least 4,000 people will be eligible for a 25% subsidy on eligible fixed assets over a 15-year investment period. Investments of Rs 5,000-11,999 crore and Rs 2,000-4,999 crore will attract 20% and 15% support, respectively, while projects investing Rs 1,000-1,999 crore will receive 10%. Subsidies will be released in milestone-linked tranches over 10 years.
A sustainability-linked incentive offers an additional two per cent capital subsidy - capped at Rs 300 crore - for shipyards delivering at least 450 tonnes of deadweight tonnage (DWT) of green vessels within six years of launching their first vessel.
Large shipyards will also be eligible for production-linked incentives of up to 15% of vessel value, capped at 2.5 per cent of cumulative eligible fixed assets per year for 10 years after commercial production begins.
Eligible projects include commercial and specialised vessels, naval and Coast Guard craft, submarines, alternate-fuel vessels and offshore assets. Marine component manufacturing has been identified as a sunrise sector to localise supply chains.