Mumbai, India: A top official said that government is in “advanced stages” to have a dedicated fund for shipbuilding industry to be handled by Exim Bank which will help the ailing sector with at least INR 15,000 crore of funds.

 

Exim Bank chairman and managing director Yaduvendra Mathur said that “We are planning to open a dedicated shipping fund within Exim Bank. It is a proposal at an advanced stage.”

 

The government has decided to set aside INR 1,500 crore for the purpose, which will serve as the equity and when combined with Exim Bank’s capability to leverage ten times, can result in the availability of INR 15,000 crore in fresh liquidity to the sector, Mathur said.

 

Initially, there was talk of creating a corporation to handle this but given past experience of an unsatisfactory outcome after formation of such a body, the government may come to Exim Bank, Mathur said.

 

“The National Manufacturing Council is strongly supporting creation of this fund within Exim Bank,” Mathur said, adding that the PMO is also supporting the Exim Bank.

 

Mathur cited South Korea with regard to ship building and added that the sector has a tremendous potential to emerge as a strong foreign currency earner for the country.

 

At present, private sector companies like Bharti Shipyard and ABG Shipyard, engaged in the sector along with the state—run ones. Many of these companies are undergoing financial stress due to tepid conditions in the industry which experts say are cyclical in nature.