Government explores Maritime Development Fund for long-term support to shipping sector

 The government is contemplating the establishment of a Maritime Development Fund (MDF) to offer low-cost, long-term financial support to the shipping sector, a senior government official revealed on Tuesday. 

T K Ramachandran, Secretary of the Ministry of Ports, Shipping, and Waterways, 

at a CII-organized event also said that the government is looking at granting infrastructure status to the shipping sector. 

Ramachandran explained that the Maritime Development Fund (MDF) could be set up either as a dedicated maritime vertical under the newly proposed development finance institution or as a standalone company with majority ownership by multilateral/bilateral agencies. 

The government is also mulling over issuing guidelines for establishing Non-Banking Financial Companies (NBFCs) at International Financial Services Centre (IFSC) for vessel financing/leasing. 

Further initiatives include considering the removal of restrictions on foreign portfolio investors (FPIs) investing in category I and category II Alternative Investment Funds (AIFs) and amending AIF regulations to create a distinct category for AIFs focused on investments in ship leasing companies. 

The government is also contemplating lifting restrictions on investment in ship leasing by insurance companies.

Ramachandran disclosed that the Ports Ministry is planning to extend the shipbuilding financial assistance policy for another 10 years. Moreover, efforts are underway for the development of shipbuilding and repair clusters in Mumbai, Kochi, and Chennai. 

The government envisions an investment of Rs 75-80 trillion in the maritime sector under the Blue Economy 2047 initiative, he said.

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