Context: 

The Maritime Development Fund is a proposed fund in India for the ship-building industry.

About Maritime Development Fund

• Objective: To Enhance the maritime sector by supporting ship-building, flagging, ownership financing, leasing, and other related activities.
  • India’s share of the world’s total tonnage: It also aims to increase India’s share of the world’s total tonnage from 2 percent of the world’s total tonnage to 5%.
  • Financial support: Provide long-term, low-cost financial support to boost the indigenous ship-building industry.
• Funding: The Maritime Development Fund will start with ₹25,000 crore to be spent over seven years. 
• It will support other initiatives such as mechanization and expanding the capacity of current ports through Public-Private Partnerships (PPP).

Significance of Maritime Development Fund

• It will reduce logistics cost 
• Promotion of ship-building industry: This initiative will promote indigenous ship building industry in India. 
• Self-reliant: This step will make India self-reliant in ship-building and reduce its dependence on other nations. 
• Growth of cruise tourism: The Maritime Development Fund will also encourage the growth of cruise tourism.
• Improvement of the competitiveness of India in international trade.

India’s Maritime Sector

• The maritime sector in India includes various components such as ports, shipping, shipbuilding, ship repair, and inland water transport systems.
• Nodal central agencies: Inland Water Transport Systems and Ministry of Shipping 

Challenges Before India’s Maritime Sector

• Infrastructure Deficits: Inadequate port infrastructure, outdated facilities, and congestion hinder efficient cargo movement.
• Lack of Investment and Financing: Indian shipping companies face difficulties in accessing required finance due to a mismatch in loan tenure (5 to 10 years) versus the vessel’s life (generally 30 years or more).
  • Insufficient private investment in port development and ship-building.
• Technological Upgradation: India is not advanced in terms of technological upgradation. 
  • India needs to invest in research and development and Embrace digitalization, automation, and smart technologies to keep pace with global advancements.

News Source: TheHindubusinessline

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