The Indian government is set to establish an Interest Incentivisation Fund as part of the ₹25,000 crore Maritime Development Fund. This initiative aims to facilitate borrowing from banks at lower interest rates for various entities. The Interest Incentivisation Fund, essentially a subsidy program, is designed to support financial institutions in reducing interest rates for borrowers, particularly in targeted sectors, thereby making credit more accessible for productive activities.
The Ministry of Ports, Shipping and Waterways has designated the National Bank for Financing Infrastructure and Development (NaBFID) and India Infrastructure Finance Co Ltd (IIFCL) as fund managers for the Maritime Investment Fund. These organizations will also oversee the implementation of the Interest Incentivisation Fund, as announced in the recent budget.
According to government estimates, India requires $18 billion to strengthen its shipbuilding and repair sectors, with an additional $388 billion needed to enhance shipping tonnage. The Maritime Development Fund will address the financing needs of the maritime industry, encompassing ports, shipping, shipbuilding, and inland water transport, through long-term, low-cost financing options.
This comprehensive approach is expected to bolster India’s position in the global maritime sector, fostering growth and innovation while ensuring sustainable practices in the industry.
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