Big push for shipping: Govt grants infra tag to large ships; easier finance access ahead

In a bid to promote Make in India, the government has included large ships in the harmonised master list of infrastructure.

Commercial vessels having a gross tonnage of 10,000 or more, which are under Indian ownership and flag, will be qualified to get infrastructure status.

Besides, the commercial vessels having a gross tonnage of 1,500 or more which is built in India and are under Indian ownership and flag will get the status.

Large ships are included in the Harmonized Master List of Infrastructure sub-sectors by insertion of a new item in the category of transport and logistics, the finance said in a gazette notification dated September 19.

The provision to include large ships above a specified size in the infrastructure harmonized master list (HML) has been announced in the Budget 2025-26.

The infra tag allows certain benefits, including access to easier borrowings overseas, the ability to raise funds through tax-free bonds, tax concessions, and access to dedicated lenders such as IIFCL, and debt funds.

The government included 'Shipyards' in the updated Harmonized Master List of Infrastructure Sub-sectors in 2016.

The harmonised master list on infrastructure has five main sectors and now 38 sub-sectors.

The five sectors include transport, energy, water sanitation, communication and social, and commercial infrastructure.

Any fresh sector or a sub-sector will be included in the master list if it has six characteristics, namely natural monopoly, high sunk costs and asset specificity, non-tradeability of output, non-rivalness in consumption, possibility of price exclusion, and presence of externalities.

According to the Maritime India Vision 2030, Indian shipping companies struggle to grow tonnage due to difficulties in accessing required finance.

Apart from proposing the infrastructure status for large ships, the Budget for 2025-26 had also announced the setting up of a Maritime Development Fund (MDF) of Rs 25,000 crore. This will directly benefit financing for ship acquisition.

It aims at boosting Indian flagged ships' share in the global cargo volume up to 20 per cent by 2047. By 2030, MDF is aiming at generating around Rs 1.5 lakh crore investment in the shipping sector.