Indian Shipping Sector to Get New Funding Options

A non-banking financing company is being developed under the Sagarmala initiative of Government of India to support the shipping and shipbuilding sectors. The proposal, initiated by the Shipping Ministry, is currently under review by the Finance Ministry and will also require approval from the Reserve Bank of India. Officials from the Shipping Ministry anticipate that all necessary approvals will be obtained by the end of the year, with the NBFC potentially becoming operational by December 2024. This financial institution aims to address the funding challenges faced by shipping companies and shipyards, which often struggle to secure funds from traditional banks.

The NBFC will cater specifically to the financing needs of the maritime industry, offering an alternative source of funding through the corporate bond market. By tapping into this market, the institution aims to provide competitive financing options to support the growth and development of shipping companies and shipyards. This initiative is expected to enhance the financial stability and sustainability of the maritime sector, ultimately contributing to the overall growth of the industry.

Overall, the establishment of this non-banking financing company signifies a significant step towards supporting the shipping and shipbuilding sectors under the Sagarmala initiative. With plans for the institution to be operational by December 2024, stakeholders in the maritime industry can look forward to accessing much-needed financial support through this new financing option.

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