Maritime Development Fund
Government Clears ₹25,000 Crore Shipbuilding Fund
Context: In a major boost to India’s blue economy, the government’s Expenditure Finance Committee (EFC) has cleared the ₹25,000 crore Maritime Development Fund (MDF) for the financial year 2025-26. The fund is aimed at providing long-term, low-cost financial support for indigenous shipbuilding and maritime infrastructure projects.
More on News
- Following EFC clearance, the proposal is now awaiting Union Cabinet approval, which is expected to be taken up soon.
- Funding for maritime projects under the MDF could begin flowing by the second quarter of FY26, one of the sources said.
- Announced in the Budget 2025-26, the MDF plan proposes that the Centre will contribute 49% of the fund, amounting to about ₹12,250 crore.
- The remaining funds will be raised through contributions from India’s 13 major ports, central public sector enterprises (CPSEs), financial institutions, other government bodies, and global funds.
Funding Structure and Global Outreach
- The major ports are expected to contribute between 15-20% of the fund, while the balance will be sourced from CPSEs, financial institutions, global equity investors, pension funds, sovereign wealth funds, and private sector players.
- The Ministry of Ports, Shipping, and Waterways has already conducted several roadshows to attract international investments into the Maritime Development Fund, the first source added.
How the Maritime Development Fund Will Work
- The MDF is designed to offer a range of financial products, including debt, equity, viability gap funding (VGF), and buyer credit, to support maritime and shipbuilding projects.
- Initially, there were plans to establish MDF as a vertical under the National Bank for Financing Infrastructure and Development (NaBFID), India’s youngest development financial institution set up in 2021.
- However, given the sector-specific funding requirements and the need for large-scale, focused financing, a decision was made to create a standalone dedicated fund or entity for maritime development.
Role of the Maritime Sector in India’s Economy The maritime sector handles approximately 95% of India’s trade by volume and 70% by value, making it the backbone of the country’s trade and commerce. This dominance is facilitated by 12 major ports and over 200 minor and intermediate ports, which together underpin the nation’s growing economy. India’s location along major global shipping lanes enhances its strategic importance. India is the fifth largest source of seafarers globally, contributing about 12% of the world’s total, with government targets to increase this share further. The coastal economy also supports around 4 million fishermen and coastal communities, making India the world’s second-largest fish-producing nation. The government has launched several schemes to modernise infrastructure, enhance port connectivity, and promote sustainability, including: Sagarmala Programme, Policy Incentives, etc.
Strategic Importance of the Maritime Development Fund
- The creation of the ₹25,000 crore Maritime Development Fund marks a significant step toward strengthening India’s maritime infrastructure, boosting indigenous shipbuilding, and enhancing the country’s competitiveness in global trade.
- By leveraging both domestic and international capital, the MDF is set to become a cornerstone of India’s strategy to develop its blue economy and port-led development initiatives.
