Government Considers Maritime Development Fund for Shipping Sector Support

The government is considering the establishment of a Maritime Development Fund (MDF) to provide low-cost, long-term financial support to the shipping sector. Ministry of Ports, Shipping and Waterways Secretary T K Ramachandran announced this at an event organized by the industry body CII. The government is also looking at granting infrastructure status to the shipping sector. Ramachandran stated that the two options for setting up the MDF are to either create a dedicated maritime vertical under the newly proposed development finance institution, or to establish a standalone MDF as a company with majority ownership by multilateral/bilateral agencies. Additionally, the government is considering notifying guidelines for setting up non-banking financial companies (NBFCs) at the International Financial Services Centre (IFSC) to undertake vessel financing/leasing.

The government is also looking at removing restrictions on foreign portfolio investors (FPIs) investing in category I and category II Alternative Investment Funds (AIFs) and amending AIF regulations to create a separate category for investments in ship leasing companies. Furthermore, the ports ministry plans to extend the shipbuilding financial assistance policy for another 10 years and is working on the development of shipbuilding and repair clusters in Mumbai, Kochi, and Chennai. Ramachandran also mentioned that the government envisions an investment of Rs 75-80 trillion in the maritime sector under the Blue Economy 2047 initiative.

In summary, the government is considering the establishment of a Maritime Development Fund to provide financial support to the shipping sector, and is also looking at granting infrastructure status to the sector. Additionally, there are plans to remove restrictions on FPIs investing in AIFs, extend the shipbuilding financial assistance policy, and develop shipbuilding and repair clusters in various cities. The government envisions a significant investment in the maritime sector under the Blue Economy 2047 initiative.

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