The government is considering setting up a maritime development fund with a view to providing low cost, long-term financial support to the shipping sector, a senior government official said on Tuesday. Ministry of Ports, Shipping and Waterways Secretary T K Ramachandran at an event organised by industry body CII said, the government is also looking at granting infrastructure status to the shipping sector.
“The government is working to set up Maritime Development Fund (MDF) for low-cost, long-term financing support,” Ramachandran said.
According to him, the two options for setting up MDF are — setting up dedicated maritime vertical under the newly proposed development finance institution, or constituting standalone MDF as a company with majority ownership by multilateral/ bilateral agency.
Ramachandran further said the government is also considering notifying guidelines for setting up NBFCs at International Financial Services Centre (IFSC) to undertake vessel financing/ leasing from IFSC.
The government is also looking at removing restriction on foreign portfolio investors (FPIs) investing in category I and category II AIFs and amend Alternate Investment Fund (AIF) regulations to create a separate category of AIFs for investments in ship leasing companies.
According to the secretary, the government is also considering removing restriction on investment in ship leasing by insurance companies.
He also said the ports ministry is planning to extend the shipbuilding financial assistance policy for another 10 years and that it is working for development of shipbuilding & repair clusters at Mumbai, Kochi and Chennai.
He said investment of Rs 75-80 lakh crore is envisaged in the maritime sector under the Blue Economy 2047 initiative.
Ramachandran said the government aims to rationalise port charges by 2030 to make Indian ports competitive vis-a-vis global transhipment ports.
The government is also exploring PPP model in towage services and dredging.
The secretary also asserted that the government is working to implement mandatory listing of tariff levied by an enterprise in a port on public domain by 2030 to bring in transparency.
He said the government is also considering providing fiscal incentive such as ‘tax holiday’ for cruise tourism industry for a period of 5 years.
According to him, the government is working on a proposal of providing long-term buyers’ credit for effective marketing of ships in the open market.
It also plans to move financing by banks/FI from asset-based financing to cash flow financing.
He said the government is working on an initiative of implementing coastal shipping incentive scheme to provide up to 50 per cent reduction in port dues and terminal handling charges for ships demonstrating modal shift. Formation of Act mandating PSUs & cooperative companies to divert 10 per cent of their monthly cargo by coastal/ inland waterways by aligning competitive cargo routes & potential ports is also considered, Ramachandran added.
