India's Finance Ministry has approved INR4.31 billion (US$45 million) in central assistance towards maintenance dredging carried out by the Syama Prasad Mookerjee Port Authority (SMPA) in Kolkata during the 2024-25 and 2025-26 financial years.
The Department of Expenditure issued the approval in an office memorandum dated October 22, 2026. The port's dredging expenditure over the two years totalled INR7.64 billion (US$80 million), leaving SMPA to fund the remaining INR3.34 billion (US$35 million).
The work will cover the Hooghly River and the navigation channels serving the Kolkata Dock System (KDS) and Haldia Dock Complex (HDC). SMPA maintains approximately 232 kilometres of channel leading to KDS and 125 kilometres leading to HDC, both subject to perennial siltation.
From FY2026-27, assistance will be released only when the port meets annual key performance indicators. These cover the proportion of cargo handled by operators working through public-private partnerships (PPPs), berth mechanisation, cargo traffic and pre-tax net surplus, with the dredging subsidy left out. SMPA said it met the targets set for FY2025-26.
"Such financial support is crucial in enabling SMPA to undertake transformative mechanisation projects through PPP mode, attract reputed private operators, and enhance overall competitiveness and efficiency," the port authority said.
The approval falls under a seven-year framework cleared by the Public Investment Board on November 12, 2025, covering FY2024-25 to FY2030-31.
Under that framework, estimated dredging expenditure is INR37.65 billion (US$400 million). The central government will contribute INR18.39 billion (US$190 million), and the port authority will fund INR19.26 billion (US$200 million) from its own resources.
The central share falls from 58 per cent in FY2024-25 to 40 per cent in FY2030-31. After that, dredging will be financed entirely from SMPA's internal resources.
