Government Hikes Maritime Fund to ₹70,000 Crore to Accelerate Shipbuilding

The Centre has decided to expand the proposed Maritime Development Fund (MDF) to ₹70,000 crore, which is 2.8 times the budget announced in the February Budget, as per The Economic Times reports. The revised amount has already been cleared by the Expenditure Finance Committee (EFC), chaired by the finance ministry’s expenditure secretary, and is awaiting Cabinet approval.

Blended Finance Model by MDF

The MDF will operate under a blended finance structure:

• 49% concessional capital from the government, including contributions from state-owned ports
• 51% commercial capital sourced from multilateral and bilateral lenders, along with sovereign funds

The model aims to provide long-term, low-cost capital across the maritime sector.

The fund is projected to generate ₹1.3-1.5 trillion in direct and indirect investments and create up to 1.1 million jobs by 2030.

Long-Term Sectoral Needs

As per the report, the government estimates indicate that India’s maritime sector will require investments worth $885-940 billion by 2047. Breakdown of projected needs includes:

• $388 billion – expanding shipping tonnage
• $260 billion – green vessels
• $224 billion – next-generation ports
• $18 billion – shipbuilding and repair hub
• $8.82 billion – boosting coastal and inland shipping
• $1.65 billion – promoting cruise tourism

Policy and Legislative Push

As per news reports, the monsoon session of Parliament (ended August 12) passed 4 key bills: the Merchant Shipping Bill, Coastal Shipping Bill, Carriage of Goods Bill, and Bills of Lading Bill. In addition, the Indian Ports Bill was cleared in the Lok Sabha, replacing the 117-year-old Indian Ports Act, 1908.

Incentives for Shipbuilding

The EFC also endorsed a revamped Ship Building Financial Assistance scheme. Support levels proposed are:

• 15% for standard vessels up to ₹100 crore
• 20% for advanced or specialised vessels above ₹100 crore
• 25% for green ships

Infrastructure status will apply to ships costing ₹100 crore and above.

Read more: BEML and Hindustan Shipyard Sign MoU for Advanced Marine Systems Development!

Regional Focus

As per reports, in July, the government announced ₹5,000 crore for strengthening waterways in the Northeast. This included ₹1,000 crore for inland waterways, new cargo terminals, 85 community jetties, and heritage restoration projects.

Conclusion

With the enlarged Maritime Development Fund and supporting policies, India is aiming for a top 10 position in shipbuilding by 2030 and a top 5 global ranking by 2047, competing with leading shipbuilding nations such as China, South Korea, and Japan.

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