The Ministry of Ports, Shipping and Waterways is preparing to launch a Rs 250 billion Maritime Development Fund (MDF) within the next three to six months, alongside a parallel fund of about Rs 250 billion for shipbuilding clusters. Cabinet note preparations are underway, with both proposals expected to be taken up for approval soon.

The MDF, announced in the Union Budget earlier this year, is aimed at providing low-cost, long-term financing for the shipping and port ecosystem. The fund will adopt a blended finance model, with 49 per cent of the capital coming as concessional government support and the remaining 51 per cent through commercial sources. Despite this structure, the government will retain ownership and control.

The fund will target maritime infrastructure projects for both major ports and private stakeholders and will offer multiple financial instruments to attract domestic and international investors. The Sagarmala Development Finance Corporation, a non-banking finance company, may play a role in disbursals. Officials said participation from multilateral and bilateral agencies, sovereign wealth funds and global investors is expected.

In parallel, a separate fund for shipbuilding clusters is being considered to strengthen India’s capacity in shipbuilding and repair, reduce dependence on foreign yards and create a globally competitive ecosystem. The clusters are expected to include infrastructure development, skilling initiatives and technology support. A blended finance model is also being explored, with central and state governments, ports and shipyards contributing to the fund.

The initiatives follow Parliament’s recent approval of five maritime Bills aimed at replacing colonial-era legislation and improving ease of doing business in the sector.

News source: The Hindu Businessline