The budget is expected to provide support to the domestic shipbuilding industry to reduce dependence on foreign liners as the country strives towards reaching the goal of $1 trillion exports by 2030.

Government sources familiar with the budget deliberations said there would be funding support and policy measures.

This push for self-reliance is driven by the attacks on shipping vessels on the Red Sea by Yemeni rebel group Houthi, which has disrupted trade with key markets in Europe, the US east coast, Africa and West Asia.

The Federation of Indian Export Organizations (Fieo) has been an advocate for a strong domestic shipping line as this will significantly reduce India’s outward remittance on transport services, a cost projected to rise alongside export growth.

“In 2022 alone, we spent over $109 billion on transport service charges,” Fieo said in a presentation to the finance ministry.

“With the $1 trillion goods export target, this figure is expected to reach $200 billion by 2030. An Indian shipping line capturing just 25 per cent of the market could save $50 billion annually.

“This would not only benefit our bottom line but also lessen the dominance of foreign shipping lines, particularly for our small and medium enterprises,” Fieo said.

India’s current reliance on foreign carriers stems from a domestic shipping fleet that has not kept pace with the country’s burgeoning trade.

The budget is likely to announce a maritime development fund of ₹15,000 crore to ₹20,000 crore spread over seven years. This fund would provide loans at competitive rates to domestic shipbuilding companies, fostering self-sufficiency in the sector.

India currently holds a meagre 2 per cent share of the global shipbuilding industry, spending over $70 billion annually on leasing vessels.

The budget might also introduce a production-linked incentive (PLI) scheme specifically for shipping-grade containers. This initiative aims to decrease dependence on imports, particularly from China, which controls a staggering 90-95 per cent of the global market.

The global container shortage was exacerbated by the Russia-Ukraine war, which has further highlighted the need to boost the domestic industry.

The government’s commitment to maritime development extends beyond the upcoming budget. Last month, they approved a ₹76,220-crore project for a state-of-the-art deep-draft port at Vadhavan in Maharashtra.

The focus on the shipping reflects India’s vision to become a cost-competitive export hub.