According to WPB, the Government of India has decided to substantially raise the planned Maritime Development Fund (MDF) to as high as €70,000 crore—close to three times its initial allocation. The action is aimed at providing firm financial support to shipyards, repair facilities, ancillary facilities, expansion of shipping fleets, and port-related infrastructure and thereby make the country a dominant player in the international maritime economy.
The Expenditure Finance Committee, under the leadership of the Ministry of Finance, has already suggested the higher corpus, and the Cabinet's final approval is awaited. The Fund will be on a blended finance model, under which 49% concessional capital will be provided by the government and state ports and the rest 51% will be raised from commercial sources such as sovereign wealth funds and multilateral lenders. This balance tries to attract a broad spectrum of investors by optimizing risk-return profiles.
India's maritime sector will need investments of approximately $940 billion at mid-century, according to projections. Most of these funds will be used to enhance shipping tonnage, green and niche ships, next-generation ports, clusters for shipbuilding and repair, and cruise and coastal tourism. The MDF will be a low-cost, long-term financing tool in its range of instruments adapted for the maritime economy.
Legislative action has now trailed monetary steps, with the Parliament having recently sanctioned a number of reform bills. Among them are the Merchant Shipping Bill, Coastal Shipping Bill, Carriage of Goods Bill, and Bills of Lading Bill, and the Indian Ports Bill that will replace the Ports Act of the past century. Authorities describe the sequence of legal reforms as a landmark change for the sector.
Parallel moves are in place to boost domestic shipbuilding capacity. These include the revised Ship Building Financial Assistance scheme, shipbreaking incentives in Indian shipyards, and the classification of large ships as infrastructure assets. Levels of support have been graduated at 15% support for traditional ships, 20% for technologically advanced or specialized vessels, and 25% for green ships that are environmentally friendly. Additionally, Sagarmal Finance Corporation Ltd, India's first-ever maritime Non-Banking Financial Company, is preparing to start functioning within the near future.
India's new maritime push is at a time of intensifying global competition. Traditional shipbuilding titans such as Japan and South Korea are re-dealing their cards, while China established its grip by merging two state-owned titans into the world's largest shipbuilding conglomerate. India has responded by making even more ambitious targets: to be among the world's top ten shipbuilders by 2030 and one of the world's top five by 2047.
Industry experts emphasize that achieving these objectives requires decisive action. Expanding infrastructure, scaling shipbuilding capacity, and strengthening financial mechanisms are considered essential steps to meet the bold targets envisioned for India’s maritime future.
By Bitumenmag
Bitumen, Shipping, Vessel, Sea
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