Pillar 1 — ₹24,736 Cr
Shipbuilding Financial Assistance Scheme (SBFAS)
Direct financial assistance to bridge the cost gap for Indian-built vessels, the world's first Ship Recycling Credit Note, and the National Shipbuilding Mission that administers both.
₹20,554 Cr
SBFAS Extension
SBFAS extension
₹4,001 Cr
Ship Recycling Credit Note
World-first instrument
₹181 Cr
National Shipbuilding Mission
Mission secretariat
Up to 25%
Assistance Rate
Specialised
Assistance Structure
Three Components of Pillar 1
₹20,554 Cr
Extension of SBFAS
Direct assistance on every ship built in India
₹4,001 Cr
Ship Recycling Credit Note
The world-first recycling-to-newbuild offset
₹181 Cr
National Shipbuilding Mission
₹181 Cr - the body that administers the scheme
Assistance Rate Structure
- Non-specialised, small vessel - up to ₹100 Cr → 15% of actual value
- Non-specialised, large vessel - first ₹100 Cr at 15%, value above at 20%
- Specialised vessel - first ₹100 Cr at 15%, value above at 25%
Phased as a WC Bridge
- Keel laying - 30% upon commencement of vessel construction
- Launch - 40% disbursed when the vessel is floated out
- Delivery - 30% released on completion & handover to the owner
Domestic Content Requirement
- < 30% domestic - no SBFAS support
- 30% to <40% domestic - pro-rata support
- ≥ 40% domestic - full support
Applicable to all vessels built in Indian shipyards, for both domestic and export orders.
Ship Recycling Credit Note
A Global First: India's Ship Recycling Credit Note
₹4,001 Cr allocated under the SBFAS with 10-year validity, from 24 September 2025 to 31 March 2036.
YOUTUBE EXPLAINER
India's world-first instrument: recycle a vessel at an HKC-compliant Indian yard and earn a credit note worth 40% of fair scrap value, redeemable against a new build. Watch on YouTube ↗
Ship Recycling
At an HKC-compliant Indian recycling yard
40%
Credit Note Issued
40% of Fair Scrap Value
Valid 3 years from recycling completion
New Shipbuilding
Offsets up to 5% of new vessel value
At an Indian shipyard
Features: Stackable Partial Utilization Transferable Market-Driven
Shipowners receive a credit note worth 40% of a vessel's fair scrap value when it is recycled at an Indian yard - stackable, transferable, and redeemable against new-build vessels at any Indian shipyard.
Eligibility & Redemption
Eligibility of Vessels
- Available for Indian or foreign-flagged vessels
- Excludes Indian vessels <24m, wooden vessels, and defence-built vessels
- Scrapped at an HKC-compliant Indian yard, with recycling permitted on/after 24 Sep 2025
Credit Note Valuation
- 40% × Fair Scrap Value
- = Price per LDT (published quarterly by the scheme committee)
- × Vessel LDT (per the Recycling Completion Certificate)
Redemption Window
- Application within 3 months of scrapping completion
- Redeemable any time after the new-build's launch
- Must be before the final SBFAS tranche is released
Process Flow - Approval & Redemption
Step 1
Beaching of Vessel
At an HKC-compliant Indian recycling yard
Step 2
Recycling completion
Certificate of Recycling issued by the respective SMB / State Government
Step 3
Application submission
Shipowner submits the SCN application on the web portal within 3 months of recycling completion
Step 4
DGMA verification
DGMA verifies the application and submitted documents
Step 5
Issuance of SCN
A digitally-signed Credit Note is issued to the applicant by DGMA
Step 6
Redemption request
The Ship Recycling Credit Note is tagged to the contract of a new-build registered under the SBFAS portal
Step 7
Vessel launch & payment
Shipyard presents the CN to DGMA, receives payment, and submits a security instrument
Step 8
Vessel delivery
On delivery of the vessel by the shipyard within scheme timelines, the security is released to the shipyard. The credit note may also be transferred/sold to another entity via the web portal.
End-to-End Digitised Process
Application
Submitted via shipbuilding.dgshipping.gov.in
Tracking
Real-time status on the DGMA shipbuilding portal
Digital Issuance
Digitally-signed credit note
Redemption
Tagged to a new-build contract & redeemed
Expected Benefits
Sustainability
Encourages safe, HKC-compliant ship recycling in India
Ecosystem Growth
Attracts new players to India's recycling & shipbuilding ecosystem
Circular Economy
Recycling proceeds feed directly into new shipbuilding
Shipyard Demand
Provides a direct business boost for Indian shipyards
Milestone: The first Ship Recycling Credit Note was issued on 29 May 2026.
Ship Recycling in India
India - A Leading Global Hub for Ship Recycling
Ship recycling is a strategic pillar of India's maritime economy and the global circular economy, recovering 97-98% of a vessel's materials and reducing demand for virgin raw inputs. The Alang-Sosiya cluster in Gujarat is the world's largest ship recycling facility. With the Hong Kong Convention (HKC) entering into force on 26 June 2025, India is the only nation with 100+ HKC-compliant yards.
115+
HKC-Compliant Yards
Only country globally at this scale
30-35%
of Global Recycling Tonnage
~800 vessels annually
20-25%
of India's Ferrous Scrap Need
Reduces import dependence
15,000+
Direct Employees
Plus indirect livelihoods for thousands
Recycling Yards Across India
| Yard | Total Plots | Operational Plots | HKC Compliant |
|---|---|---|---|
| Alang, Bhavnagar (Gujarat) | 150 | 128 | 115 |
| Steel Industries Limited (Kerala) | 1 | 1 | 0 |
| Amar Iron Udyog, Kolkata (West Bengal) | 1 | 1 | 0 |
| Total - 152 yards | 152 | 130 | 115 |
Recycling is governed internationally by the Hong Kong Convention (HKC). Source: Investment Opportunities in Shipbuilding Sector in India, MoPSW.
