Union Cabinet likely to consider ₹70,000 cr maritime initiatives soon

Queries sent to the ministry of ports shipping and waterways remained unanswered at the time of going to press

The Union Cabinet may soon consider a ₹70,000 crore package, comprising three schemes, to boost India’s maritime and indigenous shipbuilding capacities, according to officials in the know of the deliberations. 

Last week, Prime Minister Narendra Modi had announced a slew of shipbuilding initiatives worth ₹70,000 crore, citing ₹6 trillion paid to foreign shipping operators for Indian goods a year. The proposals include around ₹25,000 crore Maritime Development Fund (MDF), around ₹25,000 crore shipbuilding cluster programme for development of greenfield shipyards, expansion of brownfield shipyards and shipbuilding ecosystems, and approximately ₹20,000 crore revamped state support programme for shipbuilding — the second iteration of the Shipbuilding Financial Assistance Policy (SBFAP). 

All these were announced in February by Finance Minister Nirmala Sitharaman in her budget speech. The ministry of ports shipping and waterways has been in discussions with the Union Cabinet on the proposals, with several changes and new provisions included. 

Queries sent to the ministry of ports shipping and waterways remained unanswered at the time of going to the press. 

On September 4, this paper reported that the government has also added a ₹2,000 crore insurance provision in the shipbuilding initiative to protect shipbuilders from buyer default. The ministry and ports have signed agreements with five states for the development of a National Mega Shipbuilding Cluster to position India among top five shipbuilding nations by 2047. Agreements were signed with Andhra Pradesh, Odisha, Gujarat, Maharashtra, Tamil Nadu.

 

Incentives from both the central and state governments — such as subsidies, tax benefits, and policy support — will attract investment, promote green shipbuilding, and foster innovation, according to officials. Some of these states also signed separate agreements with individual shipbuilders for setting up of facilities.

 

The MDF will seek to enable easier finance for maritime projects, which encompass shipping, shipbuilding, and port and coastal infrastructure development with equity support coming from major ports and private investment.

 

The ministry is looking at institutions like National Bank for Financing Infrastructure and Development and IIFCL to manage the fund. Part of the fund will also be used for interest incentivisation, which will enable lower cost of finance for maritime projects with the fund acting as a bridge.