Shipping industry seeks Rs 10,000 cr fund from govt

Indian shipping industry today demanded that the Centre should create a Rs 10,000 crore fund to provide soft loans as availability of low cost money from abroad was increasingly drying up.

A corpus of Rs 10,000 crore should be created for providing soft loans to Indian shipping companies to acquire ships to take advantage of falling prices of assets because of global financial meltdown, Indian National Shipowners Association President S Hajara said.

"This fund will pave the way for raising debt at a lesser cost," he said.

Until six months ago, Indian shipping companies were able to raise debt below 4 per cent in the foreign markets, but now it has dried up, he said.

"We are making a request for financial assistance to government of India. We would like some fund creation and tax concessions," Shipping Secretary A P V N Sarma said.

Indian shipping companies raise debts from foreign markets because of cheap interest rates and long repayment duration.

While the global credit crunch and the slowdown has created problems for shipping industry, it has also presented some opportunities in terms of tonnage acquisition at competitive prices, he said.

Indian shipping companies have laid out a plan for $20 billion in the next four years to acquire vessels to maintain their marketshare.