UNION BUDGET 2026-27
Union Minister of Ports, Shipping and Waterways Mr Sarbananda Sonowal said the Feb. 1 Union Budget has provided a powerful thrust to India’s economic transformation by accelerating the Reform Express, strengthening the foundations of growth and ‘positioning the maritime sector as the anchor in achieving the vision of Viksit Bharat’.
He said the Union Budget has clearly positioned the maritime sector as a strategic enabler of India’s trade competitiveness, logistics efficiency and long-term economic resilience. “Maritime sector emerges as a strategic growth engine. The Budget has created an enabling ecosystem that empowers our stakeholders, transporters and industry partners to build capacity, expand operations and grow further,” he emphasised.
Container Manufacturing Assistance Scheme
A major highlight of the Union Budget is the announcement of a Container Manufacturing Assistance Scheme (CMAS) with a total outlay of INR 10,000 crore over the next five years. The scheme aims to establish a globally competitive container manufacturing ecosystem in India, supporting the rapid growth of containerised cargo, which accounts for nearly two-thirds of the value of international trade. Under the initiative, India targets achieving an annual domestic manufacturing capacity of approximately one million TEUs over the next decade. The programme is expected to generate a total market value of nearly INR 1.07 lakh crore, reflecting a multiplier impact of about eight times the government support. It is also projected to create around 3,000 direct jobs and more than 50,000 indirect jobs, while catalysing the development of ancillary industries such as corner castings, wooden frames, specialised steel and water-based paints. The initiative will significantly reduce India’s dependence on imported empty containers, which currently stands at nearly two million units, and strengthen national supply-chain resilience.
Mr Sonowal said: “Together with the Bharat Container Shipping Line, this marks a decisive move toward maritime self-reliance and a more resilient logistics supply chain for the country.”
Boost to inland waterways
The Union Budget provides renewed momentum to India’s inland waterways revolution. India will operationalise 20 new National Waterways over the next five years, further expanding the national network and enabling greener, cost-effective cargo movement. Mr Sonowal recalled that while only five National Waterways existed prior to 2014, the number has since expanded to 111 under the National Waterways Act. Cargo movement on inland waterways has increased from 18.1 million metric tonnes in 2013-14 to 145.5 million metric tonnes in 2024-25, recording nearly 700% growth with a compound annual growth rate of about 21%. The operational length of waterways has expanded from 2,716 km to more than 5,155 km, easing congestion on road and rail networks.
An important announcement in the Budget is the focused development of National Waterway-5 on the Mahanadi river system in Odisha. The waterway will connect the mineral-rich areas of Talcher and Angul with major industrial centres such as Kalinga Nagar and ports at Paradip and Dhamra. Major terminals will be developed at Kakudi, Kurunti and Pankapal, with coal, coking coal and limestone as principal cargo. The corridor has a cargo potential of approximately 10 million tonnes by 2032, increasing to 20 million tonnes by 2047, with an estimated investment of around INR 13,000 crore.
The Union Budget also announced the establishment of training institutes as Regional Centres of Excellence (RCoE) for skill development in the inland waterways sector. Training centres will be set up in Kolkata and Varanasi, enabling youth across the entire waterway stretch to acquire specialised maritime and logistics skills. In addition, a dedicated ship repair ecosystem catering to inland waterways will be established at Varanasi and Patna, improving operational reliability while generating skilled employment. A RCoE is also being developed in Dibrugarh, Assam.
Coastal Cargo Promotion Scheme, Indian ship ownership
The Budget announced the launch of a Coastal Cargo Promotion Scheme to incentivise modal shift from rail and road to waterways. Under the scheme, India aims to increase the share of inland waterways and coastal shipping from 6% to 12% by 2047, supporting lower logistics costs, reduced emissions and enhanced energy efficiency. To strengthen multimodal integration, the Budget proposed the development of new Dedicated Freight Corridors connecting Dankuni in the east to Surat in the west. These corridors will significantly improve port connectivity, cargo evacuation efficiency and industrial logistics. Enhanced integration of waterways with Major Ports, particularly Paradip and Dhamra, will further reduce pressure on road and rail transport.
To promote Indian ship ownership, the Budget extended the tax deduction period for units in GIFT IFSC and Offshore Banking Units from 10 to 20 consecutive years within a 25-year span. The sunset clause for Customs duty exemption on import of small vessels has been extended until March 2028, while the exemption on large vessels has been permanently removed. “These measures will encourage Indian flagging, fleet expansion and tonnage growth,” Mr Sonowal said.
The Budget places strong emphasis on ‘Purvodaya’, with focused initiatives for eastern and northeastern India. Key announcements include development of an East Coast Industrial Corridor, creation of five major tourism destinations, deployment of 4,000 e-buses, and a dedicated scheme for the development of Buddhist Circuits across Assam, Arunachal Pradesh, Sikkim and other northeastern states.
Mr Sonowal said the Union Budget clearly positions waterways, shipping, shipbuilding and container manufacturing as strategic enablers of India’s logistics and trade competitiveness. “This Budget is instrumental in propelling Bharat toward becoming a leading global maritime superpower. It balances ambition with inclusion and chooses action over ambivalence and reform over rhetoric.”
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