India Shipbreaking Credit Note: India has become the first country in the world to launch a Shipbreaking Credit Note, or SbCN, under the Shipbuilding Financial Assistance Scheme 2.0. The idea is simple. When a shipowner sends an old ship for recycling at an approved Indian yard, the owner gets a tradeable credit note. That note can later help pay for a new ship made in India.
The government says this fits into a bigger plan to grow shipbuilding, support clean recycling, and build a circular maritime economy. The wider SBFAS package was extended till 31 March 2036 and the shipbreaking credit note part has an allocation of ₹4,001 crore.
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How the Credit Note Works
India has become the first country in the world to launch the Shipbreaking Credit Note (SbCN) under the Shipbuilding Financial Assistance Scheme (SBFAS) 2.0.
This pioneering initiative transforms ship recycling into shipbuilding capital by rewarding vessel owners who recycle… pic.twitter.com/iFuCB0a9OR
— Directorate General of Shipping, Govt. of India (@dgshipping_IN) June 17, 2026
The SbCN is meant for ships that are recycled in Indian facilities that follow the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships. In the latest official guidelines, the credit note is set at 40% of the fair scrap value of the vessel. It is valid for 3 years. It is also digital, which makes the process cleaner and easier to track. The note can be transferred, so if the shipowner does not want to build a new vessel, the credit can be passed on to another eligible buyer. The rules also allow note stacking, so more than one note can be used for a later shipbuilding job.
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There is also a limit on how much can be redeemed. The guidelines say the redeemable amount is the lower of the credit note value or 5% of the fair price of the new vessel. The note can be used only for new ships ordered at an Indian shipyard that is registered on the SBFAS portal. Eligible scrapped ships include both Indian-flagged and foreign-flagged vessels, as long as they are scrapped in India at an HKC-compliant yard and the recycling permission was granted on or after 24 September 2025.
This move can bring more business to Indian yards, support cleaner recycling habits, and help India become stronger in the maritime sector. It also helps Indian shipyards match global standards while supporting jobs and industrial growth.
