India Budget 2026: Maritime Push to Unlock Global Trade, Boost Economy
Overview
Budget 2026 signals a strategic pivot for India, focusing heavily on the maritime sector – shipping, ports, and shipbuilding – to navigate global economic fragmentation. This initiative aims to bolster domestic resilience, enhance manufacturing competitiveness, and reduce logistics costs by leveraging deep-water ports like Vizhinjam and expanding shipbuilding capacity. The push seeks to position India as a key player in diversified global supply chains and a stronger economic power.
Budget 2026 proposals are poised to prioritize India's maritime sector—shipping, ports, and shipbuilding—as a critical driver for economic advancement amid global economic fragmentation and evolving supply chains.
Global Headwinds Drive Maritime Focus
The global economy faces increasing fragmentation, marked by tariff wars, sanctions, and geopolitical tensions. This environment necessitates India strengthening its domestic resilience and external competitiveness. The maritime sector, often viewed as mere infrastructure, is emerging as foundational to economic power in this new era of contested trade.
India's dependence on maritime trade is profound, with nearly 95% of its trade volume and approximately 70% of its value moving via sea. Over the past decade, port capacity has expanded to over 2,600 million tonnes per annum, supported by digitalization and private investment that has reduced average turnaround times at major ports.
Vizhinjam Port: A Strategic Game-Changer
A significant development is the Vizhinjam International Seaport in Kerala. As India's first deep-water, all-weather transhipment port, Vizhinjam's natural draft enables it to accommodate ultra-large container vessels that previously bypassed Indian shores for hubs like Colombo or Singapore. Upon full operation, it is expected to recapture substantial transhipment cargo, thereby lowering logistics costs and reducing foreign dependency for Indian trade.
Complementing port infrastructure, India is enhancing connectivity through coastal road networks and port-linked expressways, addressing last-mile logistics challenges. Projects connecting ports to industrial corridors and highways are reducing transit times and friction.
Boosting Shipbuilding Capacity
Historically, India has underperformed in shipbuilding despite its extensive coastline. Efforts are now underway to scale domestic capacity, including collaborations with global leaders like HD Hyundai to acquire advanced technology and integrate Indian shipyards into global supply chains. The aim is to move beyond low-value segments toward large commercial vessels and green ships.
Challenges persist, including a small merchant fleet share and higher logistics costs compared to competitors. However, these gaps represent significant untapped potential for growth.
Budget 2026 Opportunities
The government recognizes maritime infrastructure as a strategic asset, guided by visions like Maritime India Vision 2030. The Sagarmala program is shifting focus to port-led industrialization and multimodal connectivity. The National Logistics Policy aims to systematically reduce logistics costs as a percentage of GDP, with ports and coastal shipping as key levers.
The Indian Ports Bill, 2025, is modernizing port governance. On the shipping front, policy is targeting fleet expansion and shipbuilding support. The government has approved a Rs 69,725 crore package to boost the shipbuilding industry, aiming to make India a top shipbuilding nation by 2030 and 2047, securing a 5% share of the global market.
Budget 2026–27 presents an opportunity for long-term, low-cost financing for ports and shipbuilding, crucial for attracting large-scale private investment. Sharpened incentives for port-centric manufacturing and logistics clusters, alongside reforms in customs processes, can further boost export growth and ease of doing business.
