India’s shipbuilding industry is receiving a new financial risk-management mechanism through specialised credit insurance products designed to protect shipyards against payment and supply-chain risks. The initiative forms part of the Shipbuilding Development Scheme (SbDS), which has a total outlay of ₹19,989 crore and is valid until March 31, 2036.
The scheme provides ₹1,443 crore specifically for credit risk coverage. The framework provides for three types of protection: pre-shipment insurance, covering losses if a buyer defaults or cancels during construction; post-shipment insurance, covering non-payment after vessel delivery; and vendor default insurance, protecting shipyards when suppliers fail to deliver critical components or equipment.
Two specialised products have now been announced. ECGC Ltd’s Shipbuilding Project Credit Risk Insurance Policy (SbPCP) will cover export shipbuilding projects, while New India Assurance’s Business Credit Shield Policy Shipbuilders (BCSPS) will protect domestic projects.
The government expects the insurance framework to reduce financial stress on shipyards and improve their ability to undertake larger domestic and international orders. By reducing exposure to buyer defaults and vendor failures, the measures could also improve project bankability and support expansion of India’s shipbuilding capacity.
The broader SbDS aims to develop domestic capacity, strengthen the shipbuilding supply chain and support India’s ambition to become one of the top five shipbuilding nations by 2047.
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