India Rolls Out Two Credit Risk Insurance Policies for Shipbuilders
Risk insurance takes centre stage as India rolls out two new policies designed to strengthen credit protection and support shipbuilders in managing financial risks.
Risk insurance for shipbuilders gets a boost as India introduces two credit risk policies to support the shipbuilding industry and address financing risks.
NEW DELHI: The Ministry of Ports, Shipping and Waterways on Tuesday announced two specialised credit risk insurance products for Indian shipyards under the National Shipbuilding Mission. One covers export orders and the other covers orders from domestic buyers.
Union Minister Sarbananda Sonowal made the announcement on the concluding day of the 21st Maritime State Development Council (MSDC) meeting. The government will subsidise the insurance premiums and provide direct support to the insurers if shipyards make claims, he said.
The first product is the Shipbuilding Project Credit Risk Insurance Policy (SbPCP), developed by ECGC Ltd for shipbuilding export projects. The second is the Business Credit Shield Policy for Shipbuilders (BCSPS), developed by The New India Assurance Co Ltd for projects ordered within India.
Both fall under the Shipbuilding Development Scheme (SbDS). The ministry described them as the first policies of their kind designed for large-scale ship manufacturing.
Risk Insurance: Why a missed payment can threaten a shipyard
A vessel can take years to build, and shipyards typically depend on staged payments from buyers along the way. Sonowal said a single missed milestone payment can stall a shipyard’s entire operations. He said the new policies are meant to give yards a safety net against delayed payments and sudden swings in global markets, so they can concentrate on building vessels.
Buyer default has long been a concern for the industry. India’s shipbuilding sector is still young and capital-intensive, and industry stakeholders have for some time called for protection against such defaults. The new policies are meant to address that gap.
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Risk Insurance: How the cover fits into the Shipbuilding Development Scheme
The SbDS carries a budgetary outlay of ₹19,989 crore. It forms part of the ₹69,725 crore maritime package that the Union Cabinet cleared in September 2025. The scheme targets annual domestic shipbuilding capacity of 4.5 million gross tonnage. It also supports greenfield shipbuilding clusters, the modernisation of existing yards, and an India Ship Technology Centre under the Indian Maritime University.
The scheme includes a Credit Risk Coverage Framework, which provides government-backed insurance against pre-shipment, post-shipment and vendor-default risks. The framework is meant to make shipbuilding projects easier to finance. The two new products put that framework into operation through two state-owned insurers.
India holds a very small share of the global shipbuilding market. The government has set targets of a place among the world’s top ten shipbuilding nations by 2030 and the top five by 2047.
Risk Insurance: MSDC meets for the first time as a statutory body
The 21st MSDC meeting was the council’s first since it gained statutory recognition under the Indian Ports Act, 2025. The government notified that status on May 15 this year. The council was originally constituted in 1997. It now has a wider mandate covering integrated maritime growth, coordinated policy formulation and planned development of maritime infrastructure.
The council endorsed the priorities of the National Perspective Plan. It urged states to speed up multimodal connectivity projects across road, rail, inland waterways, pipelines and conveyors. It also resolved that states, working with the Ministry of Ports, Shipping and Waterways, will develop port-linked industrial clusters. These are to offer available land, plug-and-play infrastructure and fast-tracked approvals, and to be integrated with port capacity expansion and connectivity projects.
Sonowal also launched a Ready Reckoner for implementing ONOP, a guide for major and non-major ports. It compiles central circulars issued by the Central Board of Indirect Taxes and Customs, the Ministry of Home Affairs and the Ministry of Health and Family Welfare for inter-ministerial process reforms. It also sets out what the Centre expects from state and Union Territory governments to speed up implementation.
Sonowal said the council has entered a new statutory phase that strengthens cooperative federalism in maritime governance. He said the adoption of the Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047 targets will make the sector competitive and aligned with global standards.
