As India aims to become a competitive shipbuilding and maritime manufacturing hub, effective financing—beyond mere infrastructure—is crucial. Access to structured capital and innovative leasing frameworks is vital, yet the country still lacks a solid ecosystem for ship finance and leasing, which hampers growth for both public and private sectors. Historically, ship financing in India has been ad-hoc and heavily reliant on conventional lending practices, leaving shipyards dependent on external and often foreign financing.
Globally, asset-based financing has become integral to maritime investment, but Indian banks struggle to adopt similar models due to a lack of technical expertise and risk appetite. Establishing a stronger asset-based financing framework can improve the bankability of projects, shifting funding from transactional to long-term investment strategies. Leasing has proven advantageous in markets like China and Japan, yet India’s maritime leasing remains underdeveloped, with little participation from institutional investors. However, initiatives like India’s International Financial Services Centres (IFSCs) signal potential progress.
Addressing the knowledge gap in maritime finance is critical. Building institutional capacity within banks and insurance companies, possibly through a dedicated ship financing agency, can enhance evaluations of maritime assets. Additionally, creating a maritime finance training curriculum and incentivizing maritime lending through tax benefits could encourage domestic financial institutions to participate.
Unlocking ship financing on a larger scale necessitates regulatory realignment. Recommendations include establishing a dedicated ship finance framework, developing a centralized asset registry, and launching a national credit guarantee fund. Policymakers must recognize that effective financing is essential for industrial growth, positioning Indian shipbuilding for significant future expansion.
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