NRIs in UAE: Setting up a shipbuilding business in India after retirement

Question: I have been working in a shipbuilding yard for several years and on retirement I would like to come to India to get into a related business along with a group of friends and associates.  Are there attractive prospects for doing so?

ANSWER: The prospects in India are tremendous because currently the shipbuilding in the country is less than one per cent of the global shipyard output.  To meet this challenge, the Indian Government has announced a financial package of around Rs700 billion for investments in the maritime sector. The package has a four pronged approach, namely, to strengthen domestic capacity, improve long-term financing, promote greenfield and brownfield shipyard development and enhance technical capabilities and skilling. Three major schemes have been announced.

The shipbuilding assistance scheme will provide a financial package of Rs250 billion, the maritime development fund will provide another Rs.250 billion, and the shipbuilding development scheme will provide Rs200 billion.  All these three schemes put together are expected to generate investment of Rs4.5 trillion and result in manufacture of 2,500 vessels. The schemes are designed to attract global investments and reduce dependence on foreign ships. This package constitutes a transformative push for maritime self-reliance and will create 4.5 million gross tonnage capacity.  The initiative is expected to build resilient supply chains and enhance maritime capabilities by developing a robust maritime sector.

Question: What is India’s standing in respect of innovation capabilities?  I read some reports that the growth on this front is at a reasonable rate.

ANSWER: Based on the World Intellectual Property Organisation’s Global Innovation Index (GII) 2025, India which was at the 81st position in 2015 has risen to the 38th position among 139 economies in 2025. The GII uses approximately 80 indicators to determine the position of each country. These indicators include spending on research and development, venture capital deals, hi-tech exports and intellectual property filings.  India stands out for its ICT services exports, a vibrant VC landscape, start-up financing, unicorns and intangible assets, reflecting a tech driven growth.

India is in the process of setting up the whole value chain from semiconductors to 6G which will keep the country in the forefront of the global digital revolution. In short, the country is no longer a mere consumer of technology but is striving to be the architect of the future of technology considering the fact that communications now reach the farthest corners of the country as a result of rapid technological upgrades. Most analysts believe that the country is at an inflection point with 5G services being provided which will further boost India’s chances of climbing the innovation ladder. Further, it will become self-reliant in the sovereign data space.

HP Ranina is a practising lawyer, specialising in corporate and tax laws of India.

Question: Has progress been made by the Reserve Bank of India in its effort to make the rupee acceptable for international trade?

ANSWER: Substantial progress has been made to make the rupee an acceptable currency for international trade. The Reserve Bank of India will shortly establish a reference rate between the rupee and other currencies, starting with the Indonesian Rupiah and the United Arab Emirates Dirham. The central bank will also permit authorised dealer banks to lend in rupees to non-residents of Bhutan, Nepal and Sri Lanka for cross border trade transactions. Another measure which is proposed is to permit a wider use of special rupee Vostro Account balances by making them eligible for investment in corporate bonds and commercial papers. 

These steps will permit Indian banks to give loans in INR to importers/exporters and create a reference rate directly between INR and other currencies.  However, this will take time as currently there are not many active transactions.  Financial Benchmarks India Limited (FBIL) is the body which sets the reference rates, like the official USD-INR reference rate.  Currently, since the market is illiquid, the FBIL will first need to publish a reference rate. Once the volume of trade increases, the market sets the price through active trades which the agencies report.

The writer is a practising lawyer, specialising in corporate and fiscal laws of India.