Finance Minister Nirmala Sitharaman urged banks to work together with the Ministry of Ports, Shipping and Waterways to improve the financing ecosystem of the maritime sector.
Indian public sector banks, followed by private and foreign banks, would need to work along with the shipping ministry, Sitharaman said at the Global Maritime India Summit in Mumbai on Thursday.
"...We shall work with the banks and with the shipping ministry, to make sure banks understand the need of the sector and deal with it, not waiting for the categorisation because today our banks are in a position to take big ticket credit extensions," the Finance Minister said.
Absolute performance improvement seen in last nine years, says Finance Minister @nsitharaman.
October 19, 2023
For the latest news and updates, visit: https://t.co/gXeGqKQ77P pic.twitter.com/7G7ypVEs8kMaritime arbitration within India must be encouraged, and the maritime insurance and indemnity sector needs to be improved in the country, she said.
Advertisement"I feel a need has been felt for a full-fledged, India-owned and India-based protection and indemnity entity. It is important to have such an entity of India's ownership and that would be a useful suggestion for the ministry to take it forward," she said.
An Indian-origin indemnity entity would reduce India's vulnerability to international sanctions, provide protection of liabilities to ships operating in coastal waters and inland waters, and offer India a foothold in protection and indemnity business globally, Sitharaman said.
In terms of financing, the minister urged the shipping ministry to fast-track approved asset monetisation plans, as that would enable more funds.
Advertisement"Of 12 major ports, in nine of them, there are 31 different projects of asset monetisation (that) have been identified and approved... These are part of the asset monetisation pipeline and are expected to give an estimated Rs 14,483 crore," she said.
(Source: Office of Nirmala Sitharaman/X)
IFSC Can Be Haven For Ship Leasing
Commenting on the industry status for the maritime sector, the Finance Minister said that the International Financial Services Centre Authority in GIFT City had notified 'ship-lease' as a financial product and also provided a framework for enabling ship finance and operating leases.
Spelling out the various incentives and exemptions for ship-leasing entities in the IFSC, she said that maritime businesses could benefit from a tax holiday for 10 years and pay no capital gains during it. Stamp duty exemption is provided for five years, and there is also an exemption for income generated by way of royalty or interest paid on account of the lease of ships.
"No capital gains tax at all in the IFSC on transfer of ships by IFSC unit... So, this can really develop as a haven for ship leasing. Government of India also, in our 2022 Budget, established international arbitration centre in the (GIFT) city, so faster dispute resolution can also be expected," Sitharaman said.
Harmonised Master List In The Works
In the Union budget 2023 speech, Sitharaman announced that the Harmonised Master List would be reviewed by an expert committee to recommend classification and financing frameworks for infrastructure projects.
The Harmonized Master List is curated by the Ministry of Finance. It allows for access to concessional funds, promotion of projects and continuity of construction in the included sub-sectors.
AdvertisementCurrently, this includes five broad categories—transport and logistics, energy, water and sanitation, communication, and social and commercial infrastructure.
"The framework being developed by this committee would be instrumental in updating the HML list from time to time, and we will not wait for another committee... The framework will keep the idea of how periodically you can go about changing and categorising relevant sectors as infrastructure itself," the Finance Minister said.
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