India has announced the creation of a 250-billion-rupee ($2.9-billion) maritime development fund aimed at supporting the shipbuilding and repair industry, according to Finance Minister Nirmala Sitharaman. The fund is part of the country's strategy to enhance its infrastructure and position itself as a leading global manufacturer. This initiative aligns with Prime Minister Narendra Modi's vision for India to become a developed nation by 2047.
The government will contribute 49% of the maritime development fund, with the remainder sourced from ports and the private sector. This move comes as India's shipping fleet struggles to keep up with the nation's growing trade volume, particularly in energy imports and refined oil products exports.
In addition to setting up the fund, the government plans to establish a new shipping company in collaboration with oil refineries and Shipping Corp of India. This initiative aims to expand the national fleet and reduce dependence on foreign carriers for freight services. Following the budget announcement, shares of Shipping Corp saw a 3.8% increase.
To further bolster the maritime sector, the government will promote the creation of shipbuilding clusters, enhancing infrastructure, skills, and technology to develop the industry's ecosystem. As part of this effort, credit notes will be issued for shipbreaking in Indian yards, encouraging the dismantling of old vessels and the construction of new ones.
Additionally, Sitharaman extended the import tax exemption by ten years for inputs used in shipbuilding and shipbreaking activities, which is expected to support the domestic maritime industry by reducing costs and fostering growth.
Meanwhile, unrelated international news from Myanmar revealed that the ruling military has extended a state of emergency for another six months, according to state media.