OVERVIEW:

• In a significant development for the Indian shipping industry, Alphard Maritime Group, a leading global player in the maritime sector, has unveiled plans to establish a $500 million shipping fund at Gujarat International Finance Tec-City (CIFT City).

• This initiative, revealed during the ‘Global Ports and Shipping Summit’ in Mumbai, is set to provide a much-needed boost to India’s shipping tonnage.

• This step aims to strenghten India’s maritime sector and reduce reliance on foreign tonnage.

EMPOWERING INDIAN FLEET OWNERS:

• The core objective of this fund is to support Indian fleet owners in acquiring shipping assets, especially those within the $10-20 million range.

• Alphard Maritime will contribute Rs 5 billion ($60 million), while its associates are expected to invest an additional Rs 45 billion ($540 million).

• This combined effort will create a robust financial mechanism for fleet owners to expand their capacity and enhance India’s shipping fleet.

• This marks a strategic move towards making India a significant player in the global shipping arena, especially at a time when the country’s maritime sector is being primed for growth.

STRENGTHENING INDIA’s DOMESTIC SHIPBUILDING INDUSTRY:

• The Indian government has recently placed a strong emphasis on revitalizing the domestic shipbuilding industry, offering various financial incentives to local shipyards.

• Alphard Maritime, recognizing this opportunity, has expressed a keen interest in supporting the sector from the ground up.

• This aligns with India’s broader goals of enhancing domestic manufacturing capacity under the ‘Make in India’ initiative.

• This will also create more jobs and stimulate growth in related industries.

COLLABORATION WITH PwC & EUROPEAN LENDERS:

• The development of the $500 million shipping fund is being done in collaboration with PwC, one of the world’s leading professional services firms, which will provide its expertise in financial structuring and management.

• The fund is also backed by European lenders, many of whom already have strong business ties with Alphard Maritime.

• This partnership with established international financial institutions is expected to lend credibility to the fund and attract further investment from other global players.

INCENTIVIZING SHIPBUILDING WITH LONG -TERM CONTRACTS:

• Captain Alok Kumar, Chairman and Promoter of Alphard Maritime, called for greater involvement from state-owned enterprises in supporting the domestic shipbuilding industry.

• He suggested that companies like the Oil and Natural Gas Corporation (ONGC) could offer long-term contracts (ranging from 10 to 15 years) for offshore vessels.

• These long-term agreements would provide fleet owners with the confidence to invest in building ships domestically, despite the higher costs associated with local construction due to Goods and Services Tax (GST) implications.

CONCLUSION:

• The announcement of the $500 million shipping fund by Alphard Maritime represents a strategic push to elevate India’s position in the global shipping industry.

• Backed by Alphard Maritime, PwC, European lenders, and the Indian government’s policy framework, this initiative aims to enhance India’s shipping tonnage and shipbuilding capacity.

• It positions India as a key player in the global maritime economy, driving significant growth in the sector.