Indian Government to consider Maritime Development Fund

21 Feb 2024 CW Team

Ramachandran stated, "The government is actively working towards the establishment of the Maritime Development Fund (MDF) to offer low-cost, long-term financial support."

Furthermore, the government is exploring issuing guidelines for establishing Non-Banking Financial Companies (NBFCs) within the International Financial Services Centre (IFSC) to facilitate vessel financing and leasing activities. It is also considering lifting restrictions on foreign portfolio investors (FPIs) regarding investments in ship leasing firms.

In port-related initiatives, plans include extending the shipbuilding financial assistance policy and developing shipbuilding and repair clusters in Mumbai, Kochi, and Chennai. The government aims to invest in the maritime sector under the Blue Economy 2047 initiative.

Ramachandran stressed the government's goal to rationalize port charges by 2030 and explore public-private partnership (PPP) models for towage services and dredging operations. Additionally, the government plans to enhance transparency by mandating the listing of tariffs levied by port enterprises by 2030.

The government is also considering fiscal incentives like tax holidays for the cruise tourism industry and drafting proposals for long-term buyers' credit to facilitate ship marketing. It aims to transition financing from asset-based to cash flow financing and explore a coastal shipping incentive scheme, offering up to a 50% reduction in port dues and terminal handling charges for vessels promoting sustainable shipping practices.

Shipping; Government; Waterways; Maritime Development Fund

The Indian government, as announced by T K Ramachandran, Secretary of the Ministry of Ports, Shipping, and Waterways during a Confederation of Indian Industry (CII) event, is considering establishing a Maritime Development Fund (MDF) to provide long-term, affordable financial assistance to the shipping sector. Ramachandran outlined two potential approaches for the MDF: integrating a dedicated maritime division within a proposed development finance institution or creating a standalone MDF with predominant ownership by multilateral or bilateral agencies. Ramachandran stated, The government is actively working towards the establishment of the Maritime Development Fund (MDF) to offer low-cost, long-term financial support. Furthermore, the government is exploring issuing guidelines for establishing Non-Banking Financial Companies (NBFCs) within the International Financial Services Centre (IFSC) to facilitate vessel financing and leasing activities. It is also considering lifting restrictions on foreign portfolio investors (FPIs) regarding investments in ship leasing firms. In port-related initiatives, plans include extending the shipbuilding financial assistance policy and developing shipbuilding and repair clusters in Mumbai, Kochi, and Chennai. The government aims to invest in the maritime sector under the Blue Economy 2047 initiative. Ramachandran stressed the government's goal to rationalize port charges by 2030 and explore public-private partnership (PPP) models for towage services and dredging operations. Additionally, the government plans to enhance transparency by mandating the listing of tariffs levied by port enterprises by 2030. The government is also considering fiscal incentives like tax holidays for the cruise tourism industry and drafting proposals for long-term buyers' credit to facilitate ship marketing. It aims to transition financing from asset-based to cash flow financing and explore a coastal shipping incentive scheme, offering up to a 50% reduction in port dues and terminal handling charges for vessels promoting sustainable shipping practices.