Is Union Budget 2026 India’s Maritime Moment?

Budget 2026-27 represents a structural pivot in India’s policy trajectory, consolidating and advancing the reforms initiated in late 2025. Rather than treating ports as isolated assets, the government is now conceptualising a maritime ecosystem integrating shipbuilding, inland waterways, logistics chains, and industrial policy.

India currently incurs an estimated ₹6 lakh crore in annual freight payments to foreign shipping lines. Strengthening domestic shipping capacity, reducing logistics costs, and improving supply chain resilience are central to this framework.

The September 2025 ₹69,725 crore revitalisation package laid the foundation, targeting India’s marginal 0.06% share of global shipbuilding. Measures such as the Maritime Development Fund (₹25,000 crore) and granting infrastructure status to commercial vessels created the capital backbone, while Budget 2026-27 seeks to operationalise this capacity through inland waterways, domestic manufacturing, and sustainability measures.

Multimodal Integration: Beyond The Port Gate

Budget 2026 signals a shift beyond the conventional “port gate” approach toward an integrated logistics architecture. Ports are now anchored in a multimodal network linking inland waterways, mineral corridors, coastal shipping, and manufacturing policy. The operationalisation of 20 new National Waterways, particularly NW-5 in Odisha, illustrates this approach. NW-5 is designed to connect the mineral-rich belts of Talcher and Angul to Paradip and Dhamra ports. 

If executed effectively, this could ease rail congestion, lower freight costs, and reduce the carbon intensity of bulk cargo movement. Strategically, it constructs a hinterland-to-harbour pipeline that integrates mineral production zones with export gateways, enhancing systemic trade competitiveness.

Strengthening maintenance infrastructure is another key announcement. The development of ship repair facilities in Varanasi and Patna along NW-1 addresses a longstanding inland capacity gap. While India has established coastal ship repair hubs in Mumbai, Kochi, Chennai, and Visakhapatnam, these primarily serve port-based vessels, leaving inland waterways without adequate support. Localising repair infrastructure could reduce lifecycle costs, enhance fleet reliability, and improve the commercial viability of inland water transport for private operators.

Budget 2026 also targets a doubling of inland waterways and coastal shipping’s freight share from 6% to 12% by 2047, supported by the Coastal Cargo Promotion Scheme. Given India’s heavy dependence on road freight, a costly and carbon-intensive mode, this modal shift is strategically necessary. Yet, fiscal incentives alone may not suffice; reliability, scheduling, cargo aggregation, and digital tracking are critical to achieving the target.

From Infrastructure To Ecosystem

Taken together with the September 2025 shipbuilding revitalisation package, Budget 2026 signals the emergence of a coherent maritime-industrial strategy. The approach combines supply-side capacity building, demand generation through freight diversification, ecosystem support via repair and container manufacturing, and alignment with decarbonisation goals.

Its success, however, will depend on the readiness and capacity of states to adopt and operate these new fleets, the effectiveness of state maritime boards, and coordination between central and state authorities, since construction, jetties, and port operations involve joint responsibilities. While India has expanded its list of national waterways from 5 to 111 since the 2016 National Waterways Act, only about 25-30% are fully operational. Seasonal water fluctuations, silting, infrastructure gaps, and limited multimodal connectivity continue to constrain cargo movement, highlighting the challenges of translating policy announcements into operational impact.

The Next Phase: Building Maritime Capability

Budget 2026 attempts to recalibrate India’s development trajectory toward coastal and maritime-led growth. By linking waterways, shipbuilding, container manufacturing, and green industrialisation within a single strategic frame, the policy reflects systemic thinking rather than incremental reform. Implementing these proposals demands a holistic approach to coastal ecosystem development, where infrastructure and operational feasibility, financial viability, and structural capacity are carefully assessed. Success will also require robust coordination between central and state authorities, active engagement of state maritime boards, and sustained participation from private sector stakeholders.

Addressing gaps in inland repair facilities, ensuring multimodal connectivity, and building reliable freight corridors are equally critical to realising the sector’s potential. If executed effectively, the maritime sector could become a structural growth driver, lowering logistics costs, improving export competitiveness, creating employment, and enhancing India’s resilience in global supply chains. Budget 2026 thus lays the foundation for a sustainable, efficient and globally integrated maritime ecosystem capable of supporting long-term economic growth and the broader vision of Viksit Bharat. 

(The writer is an Associate with the International Relations vertical of the Centre for Public Policy Research (CPPR), Kochi, Kerala. Views are personal.)