Upcoming Budget may launch maritime development fund to promote shipbuilding

NEW DELHI : The central government may soon launch a maritime development fund to support firms in building ships and the announcement could be made in the upcoming Budget 2024, according to reports on July 11.

The Budget could also see the announcement of a green ship scheme under which the government plans to promote pollution-free hydrogen-based vessels on domestic waterways, according to the report.

Shares of major ship building firms were all trading in the green. The stock of Mazagaon Dock Shipbuilders was trading 3.61 percent higher at Rs 5,551.5 on the NSE at 1:30pm, while Cochin Shipyard was 5 percent higher at Rs 2,863.6.

The shares of Garden Reach Shipbuilders & Engineers were also up 5 percent at Rs 2,594.75 on the NSE The maritime development fund will likely have a corpus of Rs 15,000 crore to Rs 20,000 crore for seven years to boost self-reliance in the shipping industry. The fund will provide loans to shipbuilding firm at cheaper rates with simple conditions, the report said.

As of today, India’s share in the global shipbuilding industry is hardly around 2 percent and each year the country spends over $70 billion on leasing. However, shipbuilding requires a lot of money over a long period of time and the shipping ministry feels this fund could provide a start, according to the report, adding that the proposal has been sent to the finance ministry.

In addition, the Centre is planning to replace oil-guzzling ships plying on the Indian rivers with clean vessels by providing incentives under its green ship scheme. A pilot project is underway and Cochin Shipyard has built some green ships. The Budget announcement could see the expansion of the project, CNBC Awaaz reported.