India's Ports and Shipping Sector Needs Long-Term Financing Solutions, Say Industry Leaders

Industry representatives attending the India Maritime Week 2025 have emphasized the urgent need for better long-term financing mechanisms to support the growth of India's ports and shipping sector. Ship owners expressed concerns over bankers' hesitancy in providing loans for acquiring vessels, while port infrastructure developers are calling for debt instruments with maturities of 30 to 50 years to adequately fund their requirements.

Currently, financing options are limited, with infrastructure bonds often maturing within 15 years and bank loans carrying high interest rates being the predominant, though undesirable, avenue. The Maritime India Vision 2030 projects an investment of ₹3-3.5 lakh crore for the sector.

To bridge this gap, the Indian government has launched the ₹25,000 crore Maritime Development Fund (MDF). The National Bank for Financing Infrastructure and Development (NaBFID), a development finance institution, is expected to operationalize the MDF. Additionally, the Sagarmala Programme, aimed at port-led development, logistics cost reduction, and boosting maritime competitiveness, is receiving significant financial backing. Sagarmala Finance Corporation (SMFC) and Housing and Urban Development Corporation (Hudco) have committed ₹80,000 crore over the next decade for eligible projects. Hudco has also signed MoUs with port authorities for financing projects. A recent supportive measure allows large ships to be used as collateral for loans, intending to improve capital availability.

Impact: This news has a significant positive outlook for the Indian ports and shipping sector, potentially leading to increased investment and growth. Impact rating: 7/10

Heading: Difficult Terms India Maritime Week: An annual event bringing together stakeholders from the maritime industry to discuss policies, innovations, and business opportunities. Maritime India Vision 2030: A government plan outlining strategic initiatives and investments for the Indian maritime sector by the year 2030. Maritime Development Fund (MDF): A dedicated fund established by the Indian government to provide financial assistance for the development of the maritime sector. National Bank for Financing Infrastructure and Development (NaBFID): A public financial institution set up by the Indian government to provide long-term financing for infrastructure projects. Development Finance Institution (DFI): An institution that provides financing for economic development projects, often in emerging markets. Sagarmala Programme: An initiative by the Indian government to develop the country's coastline and promote port-led economic growth. Sagarmala Finance Corporation (SMFC): A financial entity established under the Sagarmala Programme to provide funding for port and maritime projects. Housing and Urban Development Corporation (Hudco): A government-owned corporation providing finance and consultancy services for housing and urban infrastructure development projects in India. Navratna: A status granted to certain public sector undertakings (PSUs) in India, giving them enhanced financial and operational autonomy.