Sagarmala and Maritime Investment: What NRI Investors Need to Know in 2025-26 | NRI Tax Guide

Why This Matters to NRI Investors

India wants to become a global maritime powerhouse, and the government is backing that ambition with serious money. The Sagarmala programme, the flagship initiative of the Ministry of Ports, Shipping and Waterways (MOPSW), has identified approximately 839 projects at an estimated total cost of around ₹5.79 lakh crore. The government's vision extends to 2047 under the Maritime Amrit Kaal Vision (MAKV), which means this spending will unfold over decades rather than years.

As of March 2026, the programme has made tangible progress: 128 projects worth ₹8,938 crore have been funded, with 78 projects worth ₹5,357 crore already completed. This includes 11 fishing harbors worth ₹1,057 crore that have benefited over 30,000 fishermen, and 7 coastal berths that have added 9.84 million tonnes per annum (MTPA) of cargo handling capacity.

Recent Cabinet decisions have also streamlined FDI approval timelines for critical manufacturing sectors, making it easier for foreign investors to participate in India's maritime and shipbuilding ecosystem. For NRIs who invest in Indian equities, mutual funds, InvITs, maritime bonds, or REITs, this scale of infrastructure spending creates ripple effects across multiple sectors. Let us break down what the latest government documents tell us and what it means for your portfolio.

The Five Pillars of Sagarmala

According to official Press Information Bureau (PIB) releases and the Ministry's Annual Report 2025-26, the programme operates across five pillars:

1. Port Modernization — Automation, safety upgrades, sustainable initiatives, and digital infrastructure at existing ports. As of 2026, 233 port modernization projects worth ₹2.84 lakh crore are planned by 2035, with 120 already completed (₹40,733 crore), 48 under implementation (₹64,509 crore), and 65 in planning phase (₹1.79 lakh crore).

2. Port Connectivity — Road, rail, and waterway links that connect ports to hinterland markets. A recent example is the ₹132.51 crore Road Over Bridge (ROB) at Deendayal Port (Kandla, Gujarat), approved in 2026 under Sagarmala and PM Gati Shakti, designed to reduce congestion and boost cargo efficiency.

3. Port Led Industrialization — Building industrial clusters, Coastal Economic Zones (CEZs), and manufacturing hubs near ports.

4. Coastal Community Development — Skilling programmes, employment generation, and livelihood support for coastal populations.

5. Coastal Shipping and Inland Water Transport — Expanding cargo movement along India's coastline and through rivers.

Future investments will also cover ship repair and recycling, island development, and green hydrogen fuel hubs, all aligned with the Maritime Amrit Kaal Vision (MAKV) 2047. The government targets a logistics cost reduction from the current 13-14 percent of GDP to 8 percent through improved port efficiency and connectivity.

What Has Been Completed So Far

The PIB press releases and the Ministry's Annual Report 2025-26 provide concrete numbers on implementation progress:

Port Modernization: 24 projects worth ₹1,033.43 crore have been funded. Of these, 17 projects worth ₹852.4 crore stand completed. These projects cover automation, modernization, safety measures, and sustainability initiatives.

Coastal Shipping and Inland Water Transport: 7 projects for construction of coastal berths worth ₹385.5 crore have been funded. Projects completed have added approximately 9.84 million tonnes of coastal cargo handling capacity per annum.

Fishing Harbors: 11 fishing harbors worth ₹1,057 crore have been completed, directly benefiting over 30,000 fishermen and supporting coastal livelihoods.

Overall Port Capacity: As of the 2025-26 reporting period, India's port capacity stands at 2,687 MMTPA (million tonnes per annum), with a target of 3,500 MMTPA by 2025. Over 150 Sagarmala projects have been completed to date, with the government aiming for 10 billion metric tonnes annual cargo handling capacity by 2047.

These results show steady progress, but the bulk of the ₹5.79 lakh crore pipeline still lies ahead. This means construction activity, equipment orders, and logistics volume growth will continue accelerating through the remainder of this decade.

The Non Major Ports Story

A March 2025 report from NITI Aayog titled "Impact of Non Major Ports on Shipping" examines how non major ports (those managed by state governments rather than the central government) integrate with the broader Sagarmala framework. The report analyzes market access opportunities that could emerge from developing Coastal Economic Zones proposed under Sagarmala.

As of 2026, non major port projects represent ₹2.20 lakh crore in the modernization pipeline, with 65 projects in the planning phase. This matters because non major ports like Mundra, Krishnapatnam, and Dhamra have grown rapidly and now handle a significant share of India's cargo. Several of these ports are operated by publicly listed companies or their subsidiaries, making them directly relevant to equity investors. The Sagarmala framework explicitly supports port-led industrialization and coastal economic zones, which will drive demand for industrial land, warehousing, and logistics infrastructure near these ports.

Inland Waterways: A Quiet Growth Engine

The Inland Waterways Authority of India (IWAI) operates 111 notified waterways, of which 106 are developed or under development. Sagarmala explicitly prioritizes inland water transport as a cost-effective alternative to road and rail for bulk cargo movement. The government has set a target of raising inland waterways' modal share of cargo to 15 percent by 2025.

For NRI investors, this opens opportunities in:

Cargo terminals and jetties developed under PPP models on inland waterways
Logistics companies that operate barge services and multimodal hubs
Port infrastructure companies that build and operate inland port facilities

The Ministry's Annual Report 2025-26 confirms that IWAI is actively tendering PPP projects for cargo terminals, making this a real near-term opportunity for infrastructure investors.

Updated FDI Framework for Maritime and Critical Manufacturing

The Union Cabinet has approved significant amendments to India's FDI policy, effective as of the 2025-26 fiscal year. These changes directly impact NRI investors interested in maritime, shipbuilding, and related manufacturing sectors.

Accelerated Approval Timeline for Critical Sectors

The Cabinet has introduced a definitive 60-day approval timeline for investment proposals in the following critical manufacturing sectors:

Electronic components
Capital goods manufacturing
Solar cells and polysilicon production
Electronic capital goods

While shipbuilding and maritime infrastructure are not explicitly listed in the Cabinet announcement, the broader policy framework continues to permit 100% FDI under automatic approval for port operations, inland waterways development, and ship leasing. The 60-day timeline applies to investments from countries sharing a land border with India; NRIs and investors from non-bordering countries typically face no such restrictions.

Clearer Beneficial Ownership Norms

The amended FDI guidelines provide clearer beneficial ownership norms, which simplifies due diligence for joint ventures and technology partnerships in maritime manufacturing. This expedited process enables foreign investors and companies to enter joint ventures, access technologies, and integrate with global supply chains more rapidly. The policy aims to strengthen India's competitiveness as a preferred investment and manufacturing destination while supporting Atmanirbhar Bharat (self-reliant India) objectives.

For NRI investors: If you are considering direct participation in shipbuilding joint ventures or maritime manufacturing partnerships, the clearer ownership rules reduce regulatory uncertainty and approval timelines.

Shipbuilding Financial Assistance Policy Revamp (2025-26 Budget)

The Ministry of Finance's implementation document for the 2025-26 budget outlines a revamped Shipbuilding Financial Assistance Policy. Key provisions include:

Credit notes for ship breaking at Indian yards, incentivizing the use of domestic recycling infrastructure
Enhanced financial support mechanisms for shipbuilding projects
Government support for India to achieve 4 million GT shipbuilding capacity and rank among the top five global shipbuilders by 2047

This revamp signals the government's commitment to building a complete maritime ecosystem, from new ship construction to sustainable ship recycling. For NRI investors, this creates opportunities in:

Shipbuilding companies that benefit from enhanced financial assistance
Ship recycling and breaking yards that now receive credit note incentives
Marine engineering and equipment suppliers that support both new construction and recycling operations

Watch for listed shipbuilding companies and maritime equipment manufacturers to announce new orders or capacity expansions in response to these policy changes.

Investment Angles for NRIs

Listed Port Operators and Logistics Companies

The Sagarmala spending pipeline benefits companies involved in port operations, cargo handling, container freight stations, and warehousing. When the government builds connectivity infrastructure (roads, rail links, inland waterways), it reduces logistics costs for companies that operate near these corridors. The government's target is to reduce logistics costs by 10 to 20 percent through improved port efficiency and connectivity.

NRIs investing through their NRE or NRO demat accounts should track quarterly earnings of listed port operators for signs of volume growth tied to Sagarmala projects. Watch for:

Increases in cargo throughput at ports where modernization projects have been completed
Expansion of container handling capacity
Growth in coastal shipping volumes

Prominent listed companies in this space include Adani Ports and Special Economic Zone (APSEZ), Gujarat Pipavav Port, JSW Infrastructure, Shipping Corporation of India, Cochin Shipyard, and Garden Reach Shipbuilders.

Shipbuilding and Maritime Manufacturing

With the revamped Shipbuilding Financial Assistance Policy now in place and clearer FDI ownership norms, listed shipbuilding companies and marine equipment manufacturers are positioned to benefit from:

Increased domestic ship construction orders
Enhanced government financial support for new vessels
Improved access to credit and working capital
Export opportunities as India builds its maritime fleet

NRI investors should monitor quarterly results of shipbuilding companies for announcements of new orders, capacity additions, or joint ventures with international shipyards. The combination of policy support and global shipping demand creates a favorable environment for this sector.

Ship Leasing in GIFT City (New Opportunity)

One of the most attractive recent developments for NRI investors is the expansion of ship leasing activities in GIFT City (Gujarat International Financial Services Centre). The Ministry's Annual Report 2025-26 highlights that ship leasing in GIFT City qualifies for:

Zero GST on lease payments
Tax-neutral treatment on leasing income (no MAT, no dividend tax on lease income)
100% FDI under automatic approval for ship leasing entities
Rupee internationalization benefits for cross-border leasing transactions

NRIs can participate in ship leasing funds, joint ventures, or direct ownership of leasing entities registered in GIFT City. This is particularly attractive for NRIs based in countries with which India has a Double Taxation Avoidance Agreement (DTAA), as they can claim tax credits on any taxes paid in India.

To invest in GIFT City ship leasing, NRIs should:

1. Register with the IFSCIA (International Financial Services Centres Authority) if setting up a direct entity 2. Ensure all remittances flow through proper NRE banking channels 3. Obtain a Tax Residency Certificate from their country of residence to claim DTAA benefits 4. Monitor DPIIT (Department for Promotion of Industry and Internal Trade) notifications for any updates to FDI rules

Infrastructure Investment Trusts (InvITs)

Multimodal logistics parks and port-linked infrastructure projects are exactly the kind of assets that can eventually sit inside InvITs. As Sagarmala matures and operational assets generate steady toll or usage revenue, expect more InvIT listings in the infrastructure space. NRIs can invest in InvITs listed on Indian exchanges, subject to SEBI and RBI regulations applicable to their residential status.

InvITs focused on logistics parks, warehousing, and port infrastructure will benefit directly from Sagarmala's completion of connectivity projects. SEBI has progressively eased participation norms for NRI investors in InvITs, though individual InvIT offer documents may have specific caps on NRI participation.

Maritime Bonds and Direct PPP Participation

NRI investors with larger capital can participate directly in port development projects through:

Public Private Partnership (PPP) models linked to Sagarmala, which offer long-term revenue visibility
Maritime bonds issued by port authorities or maritime development entities
Direct equity in port companies and shipping firms

These opportunities typically involve direct project participation rather than securities market investment, and they come with their own set of FDI conditions, lock-in periods, and regulatory approvals. The government has used PPP models extensively for both major and minor port development, and the pipeline of 65 planning-stage ports represents significant opportunity.

Ancillary and Thematic Plays

The government has specifically mentioned support for:

Multimodal logistics parks — Benefits construction, engineering, and logistics firms
Ship repair clusters — Benefits shipbuilding and marine engineering companies
Green hydrogen fuel hubs — Benefits renewable energy companies and green hydrogen producers
Digital infrastructure at ports — Benefits IT services and automation companies

Thematic mutual funds or ETFs focused on infrastructure, logistics, or energy transition could capture some of these tailwinds. The government's emphasis on green maritime practices and the Maritime Development Fund for green shipping create additional investment angles.

Tax Considerations for NRI Investors

Capital Gains

Short term capital gains (holding period under 12 months for listed equity): Taxed at 15% plus applicable surcharge and cess
Long term capital gains (holding period over 12 months for listed equity): Taxed at 10% on gains exceeding ₹1 lakh, without indexation benefit
For unlisted shares and direct investments, different holding periods and tax rates apply

Dividend Income

Dividends from Indian companies get taxed in the hands of the NRI at applicable slab rates. TDS at 20% (or lower treaty rate) applies on dividend payments to NRIs.

DTAA Benefits

If your country of residence has a Double Taxation Avoidance Agreement with India, you can reduce your withholding tax burden on dividends (typically brought down to 5 to 10 percent depending on the treaty) and on interest income through TDS relief. Most major NRI destination countries (USA, UK, UAE, Singapore, Canada, Australia, Germany) have DTAAs with India.

Repatriation

Investments made through the NRE route on a repatriation basis allow you to freely repatriate the principal and returns. Investments through the NRO route have an annual repatriation cap of USD 1 million (after paying applicable taxes). Most maritime PPPs do not carry repatriation restrictions on capital and gains.

Regulatory Framework and Investment Routes

Portfolio Investment Scheme (PIS)

NRIs holding a valid PIS permission from RBI can buy shares of listed port and shipping companies on Indian stock exchanges. NRIs can invest on a repatriation or non-repatriation basis through their NRE or NRO demat accounts respectively. Always confirm the current aggregate NRI holding limit for any specific company before placing an order, because some port operators sit close to the ceiling.

Foreign Direct Investment (FDI)

Port infrastructure in India allows 100% FDI under the automatic route for most sub-sectors as per DPIIT policy. This means NRIs do not need prior RBI approval for equity investments up to the applicable sectoral caps. You can invest through direct equity, PPP projects linked to Sagarmala, InvITs, or listed stocks.

Liberalised Remittance Scheme (LRS)

If you plan to fund your Indian port or shipping investments from overseas savings, remember the Liberalised Remittance Scheme (LRS) cap of USD 250,000 per financial year applies to outbound remittances by resident Indians. For NRIs sending money into India for investment, the route is typically through NRE or NRO accounts, and LRS limits do not restrict inward remittances. However, if you hold resident status for any part of the year, verify your LRS eligibility with your tax advisor.

Risks and Considerations

Regulatory risk: Port tariff regulations by TAMP (Tariff Authority for Major Ports) can affect profitability of major port operators, though the 2021 Major Port Authorities Act has introduced more flexibility
Project delays: Land acquisition and environmental clearances have been noted as delays in some Sagarmala connectivity projects; prioritize MoPSW-approved PPPs
Cyclical nature: Shipping is inherently cyclical, and freight rates can swing dramatically based on global trade conditions
Geopolitical factors: Disruptions to global trade routes can impact Indian shipping companies both positively and negatively
Currency risk: Fluctuations in the INR against your home currency affect your actual returns when you repatriate funds
Concentration risk: The Indian port sector has significant concentration, with a few large players dominating capacity

Practical Steps to Get Started

1. Open an NRE or NRO bank account with an Indian bank if you do not already have one 2. Obtain a PIS-enabled demat account from a broker authorized to handle NRI investments 3. Verify your DTAA eligibility by obtaining a Tax Residency Certificate from your country of residence 4. Monitor sagarmala.gov.in for project tenders and updates on the 65 planning-stage ports 5. Check MoPSW (Ministry of Ports, Shipping and Waterways) for Sagarmala Investment Guidelines and PPP opportunities 6. Consult your tax advisor on capital gains, dividend withholding, and repatriation rules applicable to your specific country of residence 7. Track quarterly results of listed port operators and shipping companies for volume growth tied to Sagarmala projects 8. Review SEBI circulars for the latest rules on InvIT participation by NRIs 9. Stay updated on FDI policy changes through DPIIT notifications, particularly for shipbuilding and maritime manufacturing sectors

Looking Ahead

Sagarmala 2.0 and the Maritime Amrit Kaal Vision 2047 represent a multi-decade commitment to India's maritime infrastructure. With ₹5.79 lakh crore in total planned investment, 128 projects already funded, and 78 completed as of March 2026, the momentum is real. The government's target of 4 million GT shipbuilding capacity and 10 billion metric tonnes annual cargo handling by 2047 positions India as a top-five global shipbuilder and a logistics hub.

For NRI investors, the combination of policy support, infrastructure spending, and multiple investment vehicles makes this sector worth serious consideration. Whether you choose listed equities, InvITs, maritime bonds, or direct PPP participation, the Sagarmala programme offers genuine long-term growth potential aligned with India's economic ambitions.