Budget 2026 moots several proposals to rejuvenate indigenous shipping

Union Budget 2026 has several proposals to boost coastal shipping and kickstart inland shipping that has largely been a non-starter especially in cargo carrying. It also promises ₹10,000 crore to support the making of containers in India.

After COVID period during which the government realised the value of having Indian tonnage that it can leverage for national needs, the government has announced several proposals to rejuvenate indigenous shipping. In September 2025, the Union Cabinet approved a ₹69,725 crore comprehensive package that included major investment plans so State-owned Shipping Corporation of India (SCI) could buy a range of ocean-going merchant ships. The budget has allocated more than ₹1,700 crore for 2026-27 as part of this package.

In today’s speech, the Finance Minister spoke about the government’s aim to develop inland and coastal shipping so that its share in total cargo carried through road, rail and water increases from 6% to 12%. This would not only help to decongest roads and the rail system, but, being a potentially cheaper mode, inland waterways can facilitate market access for farmers and small businesses. A major push by the government is needed to overcome the current cost and time disadvantages of inland waterways, observers say.

In a major tax relief, the presumptive tonnage tax scheme will apply to inland and coastal ship companies rather than the generic income-based tax. Tonnage tax is the global standard and is typically at 5% on a presumptive income for a given tonnage. Further, centres to train youth in inland ship repair are targeted to come up in the hinterland in Varanasi (Uttar Pradesh) and Patna (Bihar).

The Budget has proposed to establish new Dedicated Freight Corridors connecting Dakuni in the east to Surat in the west and operationalise 20 new national waterways (NW) over the next five years starting with the Brahmani-Mahanadhi NW 5. This national waterway can connect mining centres in Talcher to industrial centres and feed Paradeep and Dhamra ports. “Mahanadhi has rich potential for development and cargo carrying. But it needs sustained investment such as in periodic dredging to make this project work,” said Amitabh Kumar, former director general of shipping.

The proposal on container shipping aims to create a globally competitive container manufacturing ecosystem with a budgetary allocation of ₹10,000 crore over a five-year period.

In the past, it was considerably cheaper to import new, empty containers from China than make them in India. There were no BIS standards for the specialised steel needed to make seaworthy containers that Indian steelmakers could use to manufacture the steel. Importing steel added to the costs. Also, quality guarantees could not be ensured. “Now, BIS standards are in place on a par with global and Chinese standards and more institutions have been certified to ensure high quality of containers made in India,” adds Mr. Kumar.

Container makers would like a combination of support measures: in land acquisition, through capex subsidy and a PLI scheme. “The aim should be to ensure that when scaled up, the cost of production of containers comes down to global levels,” says N. Bhanu Prakash, faculty at the Indian Maritime University, Visakhapatnam campus. He adds that mandating the use of Indian-made containers can also be considered.