Government to boost maritime development fund to Rs 70,000 crore

The government is set to expand the proposed Maritime Development Fund (MDF) to Rs 70,000 crore—nearly 2.8 times the allocation announced in the February Budget—to accelerate growth in shipbuilding, ship repair, port-linked infrastructure, and shipping tonnage. The Expenditure Finance Committee (EFC), headed by the finance ministry’s expenditure secretary, has cleared the proposal, with Cabinet approval expected shortly.

According to reports, the MDF will follow a blended finance model: 49% concessional capital from the government, including contributions from state-owned major ports, and 51% commercial capital from multilateral and bilateral lenders, as well as sovereign funds. The fund will provide long-term, low-cost financing to the sector through instruments with varying returns and tenures, catering to a diverse set of investors.

A government estimate projects that India’s maritime sector will require $885–940 billion in investment by 2047, covering $388 billion for shipping tonnage, $260 billion for green vessels, $224 billion for next-generation ports, and $18 billion to position India as a global hub for shipbuilding and repair.

The recent monsoon session of Parliament marked a milestone for the sector, with the passage of four major bills—the Merchant Shipping Bill, Coastal Shipping Bill, Carriage of Goods Bill, and Bills of Lading Bill—while the Indian Ports Bill cleared the Lok Sabha, replacing the century-old Indian Ports Act.

Ports Secretary TK Ramachandran described it as a “landmark event,” highlighting the transformation underway. The EFC has also approved a revamped Ship Building Financial Assistance scheme, incentives for shipbreaking in Indian yards, development of shipbuilding clusters, and infrastructure status for large vessels. Proposed subsidies include 15% for standard ships up to Rs 100 crore, 20% for advanced vessels above Rs 100 crore, and 25% for green ships.

India aims to enter the global top 10 in shipbuilding by 2030 and the top 5 by 2047, competing with leaders like China, South Korea, and Japan. “India does not have the luxury to procrastinate,” said Antony Prince, CEO of G T R Campbell Marine Consultants Ltd. Dr. Ranjan Varghese of Steel Ships emphasized the need to “build up infrastructure, expand shipbuilding capacity, and revamp the banking sector” to meet Prime Minister Narendra Modi’s ambitious targets.