Deendayal Port Authority seems to be to construct smaller ships

BUOYANT BIZ: China and South Korea dominate shipbuilding
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For practically a yr, Deendayal Port Authority (DPA), which operates Deendayal port (earlier Kandla port) in Gujarat, has been pursuing an formidable plan to transform over 2,000 acres of coastal land right into a world-class shipbuilding cluster.

Initially geared toward constructing very massive crude carriers (VLCCs), the venture hit a wall after lacklustre response from business compelled DPA to scrap its tender. Now, the port is shifting focus to market-aligned vessel sizes — panamax (65,000–80,000 useless weight tonne) and handymax (40,000–60,000 DWT).

“The venture will probably be developed by DPA by way of the collection of a expertise associate. For this, we’re within the strategy of participating a advisor who will examine and counsel the phrases and circumstances for engagement with the associate. The inputs from the advisor and shipbuilders may even be used to restructure the tender,” SK Singh, Chairman, DPA, instructed businessline.

Other than the incentives that can circulate to its future associate from the Centre, the DPA is eager to help with its personal incentives, together with land with waterfront, environmental clearance and investing a portion of the fairness wanted for the venture. “We’re now not concentrating on to construct VLCCs (ships with as much as 3,20,000 DWT), as we found by way of the sooner tender that there have been few takers for it. So we’re concentrating on to discover the marketplace for panamax or handymax vessels. That may even cut back the requirement for land and waterfront,” Singh added.

Revised mannequin

A young floated to draw builders final December drew only one bid — not sufficient to maneuver ahead beneath authorities procurement norms. DPA needed to put the brakes on what was envisioned as a booster dose for the area’s maritime financial system. The concept was daring: leverage Kandla’s strategic location and deep-draught port services to construct a contemporary shipbuilding cluster that would host shipyards, dry docks, restore services and a community of supporting industries. The venture website in Kutch district was supposed to attract in personal funding and technical experience — probably including to Gujarat’s prowess as a business and defence shipbuilding hub.

But business curiosity didn’t materialise as hoped. Consultants say the muted response might be as a result of issues round capital depth, coverage uncertainty and international overcapacity in shipbuilding, particularly in a market dominated by East Asian giants like China and South Korea.

With the tender shelved, the DPA is reportedly revisiting its technique. A revised mannequin — with extra versatile phrases, authorities incentives or phased improvement — is within the works to rekindle curiosity.

4-pronged technique

This revised technique will embrace the brand new incentives proclaimed by the Indian authorities in September 2025, laying out a ₹69,725 crore complete technique to rework the nation into a worldwide hub for shipbuilding and ship restore. The primary of this four-pillar method is a Shipbuilding Monetary Help Scheme (SBFAS), which has been prolonged till March 31, 2036, with a corpus of ₹24,736 crore, together with a ₹4,001 crore shipbreaking credit score notice and tax exemptions for shipbuilding inputs.

Secondly, a ₹25,000 crore Maritime Improvement Fund (MDF) has been established — ₹20,000 crore for a maritime funding fund and ₹5,000 crore for an curiosity incentivisation fund — to make sure long-term, inexpensive financing for shipbuilding and restore actions.

Thirdly, beneath the Shipbuilding Improvement Scheme (SbDS), ₹19,989 crore has been allotted to boost India’s shipbuilding capability to 4.5 million gross tonnage yearly, by way of new and upgraded shipyards, improvement of shipyard clusters and the institution of the India Ship Know-how Centre, beneath the Indian Maritime College, for design, coaching and R&D.

The fourth pillar focuses on institutional, authorized, coverage and tax reforms, together with talent improvement, enhancement of technical functionality and inexperienced practices in shipbuilding and shipbreaking. A Nationwide Shipbuilding Mission will oversee implementation.

The revised tender is anticipated to take about three months. For now, the formidable shipbuilding venture stays adrift, ready for the tides of funding to show.

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Printed on October 20, 2025