Govt Introduces Rs 25,000-Crore Maritime Development Fund: What Is This? | Economy News

The Maritime Development Fund will include a Rs 20,000-crore Maritime Investment Fund (MIF) to promote equity financing and a Rs 5,000-crore Interest Incentivisation Fund.

Information & Broadcasting Minister Ashwini Vaishnaw on Wednesday introduced a Rs 25,000-crore Maritime Development Fund to boost shipbuilding in India. It will include a Rs 20,000-crore Maritime Investment Fund (MIF) to promote equity financing and a Rs 5,000-crore Interest Incentivisation Fund.

Maritime Investment Fund (MIF)

The MIF will promote equity financing in the shipbuilding and maritime sector. It will have an initial corpus of Rs 20,000 crore.

There will be a Governing Council and a fund manager to manage the Maritime Investment Fund. The government’s equity (blended finance structure at concessional rate) will be restricted to 49%, while the rest 51% (at commercial rate) with others.

The key focus will be ‘enhancing Indian tonnage’; ‘developing shipyards, ship repair and ancillaries’; ‘port and linked infra’; and ‘increasing modal share of inland and coastal movement’, Vaishnaw said.

The Fund has been approved by the Union Cabinet, headed by Prime Minister Narendra Modi.

The MIF will invest in priority sectors like shipbuilding, shipbuilding clusters, ship repairs, ship ownership, port expansion, IWT, and coastal shipping. It will also invest in logistics parks connectivity infrastructure and MMLPs, the minister said.

Interest Incentivisation Fund (IIF)

It will incentivise up to 3% to be provided to banks and financial institutions for loans given to Indian shipyards. This will have a corpus of Rs 5,000 crore for a duration of 10 years (up to March 2036).

Announcing the decision, Information & Broadcasting Minister Ashwini Vaishnaw said, “The Maritime Development Fund will lead to the creation of 30 lakh overall jobs in the sector. It will promote investment in the sector and drive export growth.”

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a Rs 69,725-crore package to revitalise India’s shipbuilding and maritime industry.

The package introduces a four-pillar approach designed to strengthen domestic capacity, improve long-term financing, promote greenfield and brownfield shipyard development, enhance technical capabilities and skilling, and implement legal, taxation, and policy reforms to create a robust maritime infrastructure.