Government to Approve Rs 25,000 Crore Maritime Development Fund to Boost Indigenous Shipbuilding

ENA Sectors 2024-09-09 15:27:50 New Delhi, Sep 9 (KNN) In a significant move aimed at revitalising India's maritime sector, the Indian government is expected to approve the establishment of a Rs 25,000 crore Maritime Development Fund (MDF) later this month. According to a report by Mint, this strategic fund will provide long-term, low-cost financial assistance to the nations shipbuilding industry and support blue-water infrastructure development, in alignment with the 'Make-in-India' initiative, which seeks to position India as a global manufacturing powerhouse. The MDF will operate as a corporate entity, with the government retaining a minority stake of at least 26 per cent, while the majority ownership will be extended to multilateral financial institutions and global funds. It is designed to offer a range of financial instruments, including debt, equity, buyer credit, and viability gap funding (VGF). This structure mirrors the National Bank for Financing Infrastructure and Development (NaBFID) but with a dedicated focus on maritime growth. With a targeted corpus of Rs 25,000 crore spread over seven years, the MDF will offer loans with terms extending up to 25 years, perfectly suited to the 30-year operational lifespan of most vessels. India's current fleet includes 1,526 vessels, with a gross tonnage of 14 million. However, nearly 44 per cent of these vessels are over 20 years old, highlighting the need for renewal and expansion of the fleet. The MDF aims to boost domestic shipbuilding, reducing India's annual USD 75 billion expenditure on leasing foreign ships. India presently controls only 2 per cent of the worlds maritime tonnage and holds less than 1 per cent of the global shipbuilding market, far behind leaders like China, South Korea, and Japan. The new fund will target raising India's share to 5 per cent in the coming years. Beyond shipbuilding, the MDF will support cruise tourism, port expansion, coastal shipping, and inland waterways through public-private partnerships (PPP). To attract investors, tax incentives similar to those in countries like Norway, Korea, and Japan will also be explored. This initiative is currently under inter-ministerial review, with the final cabinet note expected by the end of September. (KNN Bureau) 39210 https://knnindia.co.in/news/newsdetails/sectors/government-to-approve-rs-25000-crore-maritime-development-fund-to-boost-indigenous-shipbuilding 2024-09-09 15:27:50 knnindia.co.in Government to Approve Rs 25,000 Crore Maritime Development Fund to Boost Indigenous Shipbuilding