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The Indian government is set to contribute INR 9,800 crore to the Maritime Development Fund (MDF) in the upcoming budget, forming its share of the fund's capital. The MDF, part of a broader INR 25,000 crore maritime support package approved by the cabinet, aims to lower financing costs for shipyards, coastal infrastructure, and inland waterways projects. By mobilising investments from public and private sources, the fund targets about INR 1.5 trillion by 2030. Experts believe it could accelerate fleet modernisation, improve competitiveness, and strengthen India's maritime sector in the long term.
The government is preparing to operationalise the Maritime Development Fund with an allocation of INR 9,800 crore in the forthcoming budget, representing its share in the fund's capital. The MDF is part of a total INR 25,000 crore fund approved by the cabinet to support shipyards, ports, and inland waterways projects. This contribution is expected to be complemented by investments from ports, public sector units, private equity, and institutional investors, helping mobilise long-term capital for the maritime sector. Advertisement
The fund is designed to reduce high financing costs that Indian shipowners face compared with global counterparts. It will support concessional loans, equity participation, guarantees, and viability gap funding for projects such as shipbuilding, vessel acquisition, yard modernisation, and coastal cluster development. Fiscal incentives such as customs duty waivers and tonnage tax benefits will further improve the commercial viability of these projects.
Officials highlight that the MDF will provide a mix of debt and equity support, with INR 5,000 crore specifically earmarked to subsidise borrowing costs. This is intended to make investments in shipyards, inland shipping, and port infrastructure more financially attractive. Guidelines for eligibility, tenor, and governance of the fund are expected to be finalised shortly after budget approval.
The initiative aligns with earlier government strategies aimed at boosting India's share in global shipbuilding and achieving top-five status among ship-owning nations over the next two decades. Industry stakeholders have welcomed the move, noting that access to affordable long-term finance is crucial for fleet modernisation, expansion, and adoption of greener shipping practices.
While the government has formally approved the fund, operational clarity, timely disbursement, and coordination with private investors will be key to achieving the intended objectives. If implemented effectively, the MDF could address longstanding financing challenges and support India's long-term maritime growth and competitiveness on the global stage.
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