The Indian government’s Union Budget 2023 has brought in new initiatives that are expected to have a positive impact on the country’s shipping industry. The government’s focus on the promotion of coastal shipping through Public-Private Partnership (PPP) mode with Viability Gap Funding (VGF) is one such measure that is expected to provide a boost to the sector.
As per the new budget, the Indian government is planning to deploy PPP and VGF models to promote coastal shipping in the country. This move is expected to attract private investments and provide much-needed support to the industry. The initiative is expected to reduce the cost of logistics and enhance the efficiency of cargo transportation.
According to Union Finance Minister Nirmala Sitharaman, the government is planning to develop new greenfield ports and augment the capacity of the existing ones to promote coastal shipping. The government aims to promote coastal shipping as a more sustainable and cost-effective mode of transportation, as compared to road or rail transport.
The new initiatives are also expected to create employment opportunities in the sector, and boost the economic growth of the country. The government is expecting that the promotion of coastal shipping will reduce the cost of logistics, which will improve its contribution to the country’s GDP.
The shipping industry has welcomed the government’s initiatives, and industry experts believe that the new measures will help India achieve its goal of shipping $1 trillion worth of manufacturing goods by 2028. However, some experts have also pointed out that there are certain challenges that the industry will have to overcome to achieve this goal.
One of the key challenges is the lack of infrastructure and inadequate port capacity. India’s ports are currently operating at almost 90% of their capacity, and this could hinder the growth of the sector. To overcome this challenge, the government is planning to develop new ports and enhance the capacity of the existing ones.
Another challenge that the industry is facing is the high cost of transportation. The government’s focus on the promotion of coastal shipping is expected to address this challenge to a certain extent. By reducing the cost of logistics, the industry will become more competitive and will be able to attract more business. In conclusion, the Union Budget 2023 has brought in several measures that are expected to have a positive impact on the shipping industry. The promotion of coastal shipping through PPP mode with VGF, the development of new ports, and the enhancement of the capacity of the existing ones are some of the key initiatives that are expected to provide a boost to the sector.