Rs 25k Cr Shipbuilding fund set to be cleared to grow Blue Water Economy in India
NEW DELHI : Indian Government may approve a proposal for a ₹25,000-crore Maritime Development Fund this month for providing long-term and low-cost financial support for indigenous ship-building and other blue water infrastructure projects, two persons in the know of the mater said.
The government may approve a proposal for a ₹25,000-crore Maritime Development Fund this month for providing long-term and low-cost financial support for indigenous ship-building and other blue water infrastructure projects, two persons in the know of the mater said.
The Maritime Development Fund will have a corpus of Rs 25,000 crore over seven years, providing long-term loans of up to 25 years to align with the 30-year lifespan of vessels.
How many vessels does India currently have?
India’s fleet currently stands at 1,526 vessels with a gross tonnage (GT) of 14 million as of December 2023. However, about 44 per cent of these vessels are over 20 years old, indicating a need for replacement in the coming years.
The move comes amid inter-ministerial consultations, with a final cabinet note to be submitted by the end of September for approval.
Key objectives of the MDF
The fund will promote domestic shipbuilding of all types and sizes to reduce India’s dependence on foreign ships. Currently, India spends close to $75 billion annually on leasing ships and controls only 2 per cent of the world’s total tonnage.
India holds less than 1 per cent of the global shipbuilding market, which is dominated by China, South Korea, and Japan. The MDF aims to boost this to 5 per cent in the coming years.
It will also support the development of cruise tourism, expand port capacity, promote coastal shipping, and develop inland waterways through public-private partnerships (PPP).
Tax incentives similar to those offered in countries like Norway, Korea, and Japan will also be considered to attract domestic and global players into the Indian ship leasing and management sector.