Sri Vijaya Puram: The Union Budget 2025-26 outlines sectoral allocations and policy frameworks that are likely to impact the Andaman and Nicobar Islands, with a focus on maritime infrastructure, regional air connectivity, and tourism development.
Among the key announcements is the launch of a revamped Shipbuilding Financial Assistance Policy, accompanied by the formation of a Maritime Development Fund with a corpus of ₹25,000 crore. The fund will support shipbuilding, ship repair, and shipbreaking activities across Indian yards. The inclusion of Credit Notes for shipbreaking is expected to benefit coastal and island regions with existing or potential shipyard facilities.
The Budget also proposes the creation of shipbuilding clusters across the country. While specific locations are yet to be finalised, island territories with maritime relevance, including the Andaman and Nicobar Islands, stand to be considered for inclusion based on geography and logistical potential.
The continuation of the UDAN (Ude Desh Ka Aam Nagrik) scheme is another measure relevant to the islands. The scheme, which subsidises regional air connectivity, supports efforts to enhance accessibility between the mainland and remote areas. For the Andaman and Nicobar Islands, where inter-island travel remains dependent on limited sea and air options, this could enable improved air services and connectivity extensions.
The Budget also places emphasis on tourism-led employment, with a challenge-based funding model for the development of the top 50 tourist destinations in the country. The scheme will be contingent on state and UT governments facilitating land availability for infrastructure. Simultaneously, the reclassification of hotels under infrastructure status is expected to improve access to long-term finance for the hospitality sector.
These announcements align with the broader tourism potential of the Andaman and Nicobar Islands, where several locations have seen sustained visitor interest over the last decade. Designated tourism zones and infrastructure projects under the Pradhan Mantri Gati Shakti programme may find synergy with the new challenge-based funding model announced in the Budget.
Under the infrastructure category, the Budget does not mention specific allocations for island territories. However, schemes applicable across coastal and remote regions, including support for shipyards, regional connectivity, and tourism infrastructure, may be accessed by the islands, subject to administrative readiness and inter-agency coordination.
No new centrally sponsored schemes exclusive to the Andaman and Nicobar Islands were announced. However, existing national frameworks in health, agriculture, digital governance, and rural livelihoods will continue, as per the standard Union allocations.
The focus areas outlined in the Budget are aligned with the Union government’s broader economic themes, connectivity, employment generation, and sustainability. For the Andaman and Nicobar Islands, this translates into policy openings in sectors such as maritime logistics, regional aviation, and destination-based tourism infrastructure.
Implementation will depend on project approvals, departmental coordination, and policy execution by the territorial administration. The proposals in the Union Budget 2025-26 serve as a framework within which Union Territories, including the Andaman and Nicobar Islands, can position themselves for inclusion under central initiatives.
