Union Budget 2026 casts India’s maritime domain as a strategic engine, aligning inland connectivity, manufacturing, and heritage with economic resilience and global ambition
India’s Union Budget 2026 marks a significant moment for the country’s maritime ecosystem. By placing renewed emphasis on shipping, shipbuilding, container manufacturing, and waterways, the Budget acknowledges their growing role in economic growth, national security, and global competitiveness. At a time when global trade routes are evolving and supply chains are being recalibrated, the Budget clearly signals that India’s maritime future will focus on domestic strength while pursuing its global ambitions.
With an expanded role for the Ministry of Ports, Shipping and Waterways (MoPSW), the Budget allocates INR 5,164.8 crore for FY27, nearly 48 percent higher than last year, reflecting a commitment to strengthening maritime trade, infrastructure, and transport systems in line with national priorities. With effective implementation, these measures can enhance India’s industrial capacity in the maritime sector, while reclaiming the cultural role of the seas.
The Budget promotes national waterways as a practical, viable, and sustainable transport alternative for India. It proposes the operationalisation of 20 additional National Waterways over the next five years, starting with National Waterway-5 in Odisha. This reflects an intent to expand India’s river transport network. These routes will also help connect mineral-rich regions such as Talcher and Angul with ports like Paradip and Dhamra, reducing freight costs. Additionally, with cargo traffic growing 700 percent at a Compound Annual Growth Rate (CAGR) of 21 percent, the operational length of waterways has been extended from 2,716 km to more than 5,155 km, easing congestion on road and rail networks.
With an expanded role for the Ministry of Ports, Shipping and Waterways (MoPSW), the Budget allocates INR 5,164.8 crore for FY27, nearly 48 percent higher than last year, reflecting a commitment to strengthening maritime trade, infrastructure, and transport systems in line with national priorities.
Currently, 32 of the 111 nationwide National Waterways identified by the Inland Waterways Act, 2016, are operational. Of these, National Waterway 1 along the Ganga-Bhagirathi-Hooghly route has already become commercially viable. Moreover, terminal upgrades and the recent announcement of new waterways and rail-linked infrastructure worth over INR 830 crore in West Bengal highlight the growing importance of the Hooghly stretch. These developments illustrate the role of inland waterways in efficiently connecting industrial clusters while offering greener options. The Budget also emphasises various connectivity initiatives in eastern and northeastern India, including industrial corridors and tourism hubs.
The Budget stresses multimodal integration through Dedicated Freight Corridors. The proposed east-west link from Dankuni to Surat aims to connect rail, road, inland waterways, and ports into a seamless logistics corridor. Ship repair facilities are also being planned at Varanasi and Patna to build local capacity for inland vessels and expand river-based transport. These measures aim to gradually shift heavy freight movement from road and rail to energy-efficient inland water transport. Expanding such projects to other states with extensive inland waterways — including Kerala, Andhra Pradesh, and Tamil Nadu — will also be crucial. While the Budget’s long-term goal of increasing the share of inland waterways and coastal shipping from 6 percent to 12 percent by 2047, alongside the launch of a Coastal Cargo Promotion Scheme, may seem ambitious, it could help foster a more sustainable and resilient logistics framework for India.
While the Budget’s long-term goal of increasing the share of inland waterways and coastal shipping from 6 percent to 12 percent by 2047, alongside the launch of a Coastal Cargo Promotion Scheme, may seem ambitious, it could help foster a more sustainable and resilient logistics framework for India.
With an INR 10,000 crore Container Manufacturing Assistance Scheme spread over five years, the Budget underscores the importance of expanding domestic manufacturing capabilities in the maritime sector. India continues to remain heavily dependent on container imports. Maritime trade accounts for nearly 95 percent of India’s trade by volume and around 70 percent by value. Yet, India’s global shipbuilding output is currently at less than 1 percent at a time when the country aims to become among the top five global shipbuilding nations by 2047. Developing domestic capacity in these areas will enhance both supply chain resilience and give India a competitive edge within global logistics value chains, as envisioned under the Maritime Amrit Kaal Vision 2047. To this end, the budget also offers extended tax benefits for units in GIFT IFSC (Gujarat International Finance Tec-City International Financial Services Centre) and Offshore Banking Units, with revised customs duty exemptions on vessels to encourage fleet expansion and domestic ownership.
India continues to remain heavily dependent on container imports. Maritime trade accounts for nearly 95 percent of India’s trade by volume and around 70 percent by value. Yet, India’s global shipbuilding output is currently at less than 1 percent at a time when the country aims to become among the top five global shipbuilding nations by 2047.
Rather than being limited to an industrial incentive, this initiative is part of the broader “Atmanirbhar Bharat” vision, aimed at fostering self-reliance across container manufacturing, port development, inland waterways, logistics parks, and shipbuilding. This will also mean the generation of 3,000 direct jobs and more than 50,000 indirect jobs, along with the emergence of ancillary industries, thereby reducing India’s vulnerability to external shocks and geopolitical uncertainties in global shipping. Additionally, the Budget introduces incentives for indigenous seaplane manufacturing and operations to improve last-mile connectivity and promote tourism in remote and island geographies. This innovative approach shows that India is looking to diversify its transport mix and integrate new solutions into its existing transport networks.
Furthermore, the Budget promises simultaneous investments in human capital and capacity building. The proposed Regional Centres of Excellence for training in inland waterways and maritime operations aim to build a skilled workforce across riverine and coastal regions. This focus on training and skill development will be essential to sustain the long-term operational expansion of waterways, ports, and vessel services.
The Budget also highlights India’s maritime heritage as a key strategic asset. It proposes developing 15 archaeological sites as public destinations, including Lothal and Dholavira. Lothal — home to one of the world’s earliest known dockyards and a major port of the Indus Valley Civilisation — currently hosts India’s ambitious 400-acre National Maritime Heritage Complex (NMHC) in Gujarat, with an estimated cost of INR 4,500 crore.
Led by the MoPSW, the NMHC is being developed as a world-class museum and knowledge hub to showcase India’s long-standing engagement with maritime trade and navigation. Expanding the complex and developing its surrounding areas could provide a significant boost to maritime heritage tourism and awareness, while ongoing initiatives at NMHC are already advancing further research and learning. Moreover, the upcoming Dholera Greenfield International Airport will provide direct air connectivity to Lothal for domestic and international tourists.
Developmental efforts at sites like Lothal and Dholavira can strengthen cultural identity and exchange, alongside supporting tourism and education, thereby linking India’s ancient seafaring traditions with its maritime ambitions.
Recent collaborations through Memorandums of Understanding with countries such as Germany, the Netherlands, Vietnam, the United Arab Emirates, Oman, Thailand, and Portugal, among others, highlight the global relevance of NMHC and India’s growing leadership in maritime heritage preservation and community participation. Developmental efforts at sites like Lothal and Dholavira can strengthen cultural identity and exchange, alongside supporting tourism and education, thereby linking India’s ancient seafaring traditions with its maritime ambitions.
Union Budget 2026 suggests a purposeful rethinking of India’s maritime policy. As a coordinated approach linking infrastructure, manufacturing, skills development, and heritage, the Budget lays out actionable and forward-looking pathways. At the same time, the Budget refocuses attention on building domestic capabilities and generating new employment opportunities across the sector. Improved inland connectivity can help lower logistics costs and mitigate adverse environmental impacts, thereby supporting long-term competitiveness and enhancing resilience. Meanwhile, investment in maritime heritage reinforces India’s cultural influence and soft power.
However, the real test will lie in effective implementation and appropriate nationwide scaling-up to ensure broad-based benefits. Success and outcomes will depend on coordination across institutions, timely funding, workforce delivery, and the capacity to sustain momentum. If executed well, with people at the centre, these efforts can advance both economic and strategic objectives while linking India’s maritime heritage to the possibilities of global ocean futures.
Anusha Kesarkar Gavankar is a Senior Fellow at the Observer Research Foundation.
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Dr. Anusha Kesarkar-Gavankar is Senior Fellow at the Observer Research Foundation. Her research spans the maritime economy, with a focus on sustainability, infrastructure, port-led development, ...
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