Shipping may get ₹25,000-crore lift

The domestic shipbuilding industry may receive a boost in the forthcoming Union budget, with the central government chalking out a plan for financial support.

- Subhash Narayan

According to two persons aware of the development, the Centre is finalizing the contours of a ₹25,000 crore maritime development fund (MDF) that would provide long-term and low-cost financial support for shipbuilding in India, and other blue-water infrastructure projects.

They added that the new scheme is expected to be announced and operationalized as part of the Union budget for 2025-26.

To attract pension funds and sovereign wealth funds to participate in the fund, the Union ports, shipping and waterways ministry is planning investor meets and road shows in the US, Europe, and Asian markets, the first person cited above said on the condition of anonymity.

The Centre would stand guarantor for all investments into the MDF and would also be its biggest participant. The finance ministry is working out the Centre's share and giving final touches to the proposal based on suggestions given by the shipping ministry, the first person added.

Mint had earlier reported about the MDF to be structured as a corporate entity, with the government holding a minority stake of at least 26%, while the majority shareholding will be offered to multilateral financial institutions and global funds.

The fund is being set up to provide various forms of financial support, including debt, equity, viability gap funding (VGF), and buyer credit. It will be similar to the National Bank for Financing Infrastructure and Development (NaBFID), which provides long-term funds to infrastructure projects, but will have a dedicated focus on the maritime sector.