Mint Explainer: What infrastructure status for large vessels means for India's ship owners and shipyards

The measure aims to unlock long-term, low-cost finance availability for shipowners and shipbuilders, strengthen India’s maritime capabilities and push the country closer to its vision of becoming a global maritime power by 2047. Mint explains how the development can be a gamechanger for the shipping sector.

What does inclusion of large ships in the Harmonised Master List (HML) of infrastructure subsectors mean?

The government has officially classified large ships as part of the infrastructure sector by including them in the Harmonised Master List (HML) maintained by the Department of Economic Affairs.

The department, in a 19 September notification, added large ships in the HML of infrastructure subsectors under the broad category of transport and logistics, granting infrastructure status to commercial vessels with a gross tonnage of 10,000 or more, which are under Indian ownership and flag, or commercial vessels with a gross tonnage of 1,500 or more, which are built in India and are under Indian ownership and flag.

This classification completed the chain in the shipping sector after shipyards set up for carrying on shipbuilding, repairs and breaking activities had been given infrastructure status.

How does infrastructure status help the shipping sector?

Banks, financial institutions and regulators use the HML to identify projects eligible for infrastructure-lending norms and priority treatment in credit and investment. By bringing large ships into the list, vessels—especially those owned or built in India—can now access the same financial benefits that apply to infrastructure projects such as highways, ports and airports.

These include longer loan tenures of up to 20 years instead of the usual 7-10 years, lower interest rates as these loans carry reduced risk weights for banks, access to bond and infrastructure debt markets and eligibility for government-backed credit guarantees or refinancing.

It is a recognition that ships, like other capital assets, are crucial national infrastructure that support trade, logistics and economic growth.

“Infrastructure sector status would allow Indian companies access to long-tenure, low-cost funds which will help Indian companies acquire and operate more ships, both for coastal and global shipping operations. This will help reduce the cost of operations of Indian entrepreneurs and considerably ease operational cash flows since funds available for capital-intensive purchases will match repayments linked to asset’s life spanning 12-15 years," said Anil Devli, chief executive officer (CEO) of the Indian National Shipowners’ Association.

Why is this move significant for India’s shipping sector now?

India’s shipping sector has long suffered from high capital costs and limited domestic financing options. While China, South Korea and Japan have large, state-supported shipbuilding finance ecosystems, Indian shipowners have relied heavily on costly foreign loans.

As a result, Indian companies own only about 1% of the world’s tonnage and India ranks 18th globally in ship ownership. Almost 90% of India’s export-import cargo by volume is carried on foreign ships.

By granting infrastructure status, the government aims to change this equation and align with its vision to make India a top five ship-owning and shipbuilding nation by 2047.

How will infrastructure status promote shipbuilding and ship ownership in India?

Shipbuilding and ship ownership are closely linked—when shipowners can raise funds more easily and cheaply, they are more likely to place orders with Indian shipyards.

Including ships in the HML reduces the lifecycle financing cost for owners as they can borrow at infrastructure rates (which are 2-3 percentage points lower than commercial rates). Longer repayment periods also make investments in vessels financially sustainable.

Additionally, with easier refinancing and access to infrastructure bonds, Indian owners can renew or expand their fleets faster. This creates steady demand for domestic shipyards, enabling them to scale up capacity, invest in technology and compete globally.

How will the new status work alongside other maritime funding schemes?

The inclusion of shipping as infrastructure complements three key initiatives of the ministry of ports, shipping and waterways. The government has announced a ₹70,000 crore package for the sector that includes the ₹25,000 crore Maritime Development Fund, which will offer low-interest loans, guarantees and refinancing for Indian-flag vessels, improving access to long-term capital.

The package includes the ₹25,000 crore Shipbuilding Financial Assistance Scheme, which provides financial assistance of up to 20% of the contract price to Indian shipyards for each vessel built in India.

The third pillar of the package is a ₹20,000 crore Shipbuilding Development Fund that will incentivise development of shipping and shipbuilding clusters in the country.

Together, these initiatives create a comprehensive financial ecosystem—from shipyard construction to vessel operation—reducing the overall cost of ownership and improving credit availability across the value chain.

What will be the impact on Indian-flag shipping and trade?

With lower-cost financing and better incentives, Indian shipowners will be encouraged to register vessels under the Indian flag, rather than using foreign flags for convenience. This will help increase the share of India’s cargo carried by Indian ships, which currently stands at less than 10%.

A stronger Indian fleet will also mean more earnings retained in India through freight, insurance and port-related services, while generating jobs for Indian seafarers. Over time, this can make India’s logistics chain more resilient and self-reliant, reducing dependence on foreign fleets during supply disruptions or crises.

How does this align with India’s long-term maritime vision?

The inclusion of ships in the HML is a cornerstone policy under the Maritime Amrit Kaal Roadmap, which charts the course for India’s maritime growth till 2047. It directly supports the national goals of: expanding India’s merchant shipping tonnage, making India a preferred global shipbuilding hub, creating maritime jobs and ancillary industries, and strengthening India’s role in global supply chains.

By treating ships as infrastructure, India is acknowledging that shipping is not just a transport business—it’s a strategic asset vital to trade, energy security and industrial growth.