Union Budget 2025: Maritime Development Fund to be set up to boost shipbuilding activities

New Delhi: In its bid to push shipbuilding activities in the country, the government will set up a Maritime Development Fund (MDF) with a corpus of Rs 25,000 crore as the Union Finance Minister, Nirmala Sitharaman announced while presenting the Union Budget for eight consecutive times. 

The MDF has been proposed to establish long-term financing for the maritime industry, aimed at pushing ship repair and investment in greenfield ship yards.

Sitharaman said that the corpus of Rs 25,000 crore will have up to 49 percent contribution from the Union government and the rest will be mobilized from the ports and private sector. 
 
As per the reports, the shipbuilding and ship repair clusters are being planned across five States -- Gujarat, Maharashtra, Kerala, Andhra Pradesh and Odisha.

The fund is expected to cover 25 – 30 years, which is also the lifespan of vessel.

India’s fleet currently stands at 1,526 vessels with a gross tonnage (GT) of 14 million as of December 2023. However, about 44 per cent of these vessels are over 20 years old.

Currently, India has less than 1 per cent of the global shipbuilding market. China, South Korea, and Japan are dominating the market as of now. The MDF aims to boost this to 5 per cent in the coming years.

The MDF will further support the development of cruise tourism, expand port capacity, promote coastal shipping, and develop inland waterways through public-private partnerships.