India's proposal to add 100 merchant vessels over five years put the economics of ownership at the centre of the National Shipping Board's August 25, 2026 dialogue in Delhi. The ministry's account recorded a panel argument that Indian-flag operations cost 16 to 20 percent more than foreign-flag alternatives, owing to taxes and domestic capital costs.
The panel linked that claimed disadvantage to cargo competition: Indian owners were expected to match foreign freight rates under the Right of First Refusal mechanism. Its recommended response combined fiscal changes, cargo support, competitive financing and simpler regulation. The underlying commercial problem is the relationship between the cost of operating a ship and the price at which it can win work.
An earlier Cabinet decision shows how financing support was being structured. On September 24, 2025, the government approved a Rs 25,000 crore Maritime Development Fund, comprising a Rs 20,000 crore investment fund and a Rs 5,000 crore interest-incentivisation component. The investment fund envisaged 49 percent government participation; the second component was intended to reduce effective debt costs and improve project bankability.
These components address different parts of a maritime project's funding. Investment capital supports the financing base, while interest support changes the cost attached to borrowing. That distinction gives the call for competitive finance a concrete policy setting rather than treating the entire Rs 25,000 crore as a single ship-purchase grant.
In a March 13, 2026 parliamentary reply, Shipping Minister Sarbananda Sonowal said the governing council had been constituted and operational guidelines issued. He identified shipbuilding, repair, ownership, ports and inland, coastal and international shipping among the permitted sectors. The fund therefore spans the chain from building and maintaining vessels to owning and operating them. Its scope helps explain why a fleet-expansion proposal sits alongside shipyard and transport-infrastructure policy.
