India is preparing a ₹40 billion ($454 million) incentive package to boost its shipbreaking industry and reclaim market share from leaders Bangladesh and Pakistan.
The government is expected to roll out these benefits over ten years starting in 2026, with approval from the cabinet likely by the end of September.
One of the key incentives will be a credit note equal to about 40% of the ship’s scrap value for owners who bring their obsolete vessels to India. The credit note, valid for three years, can be used to purchase domestically built ships. Ship owners will also be allowed to combine multiple credit notes in one transaction or sell them.
The move aims to strengthen India’s position in the global ship recycling sector. In 2023, India handled a third of the world’s dismantled ships, trailing Bangladesh’s 46% share, according to government data.
India’s western coast is home to Alang, the world’s largest ship graveyard, which handles 98% of India’s dismantling business. Yet, neighboring Bangladesh and Pakistan have been gaining ground due to cheaper labor and competitive services.
The shipbreaking industry has been recovering in recent months after a downturn caused by the decline in oil tanker scrapping following Russia’s invasion of Ukraine. Geopolitical disruptions forced vessels to reroute, raised freight rates, and led shipowners to prolong the lifespan of aging ships.
To further enhance its industry, India is also considering establishing a new shipbreaking facility on its east coast to divert business from Bangladesh.
In addition, the government is expected to approve a ₹250 billion maritime development fund this month. The fund, announced in February as part of the union budget for 2025–26, aims to promote domestic shipbuilding and reduce reliance on foreign vessels.
The shipping ministry and Press Information Bureau have not yet responded to requests for comment on the proposed incentives. These initiatives are part of India’s broader strategy to reclaim leadership in ship recycling and strengthen its maritime capabilities.