With the avenues to secure loans for expansion and modernisation plans drying up, the shipping industry has asked the government to set up special fund to help the industry finance such projects.
"We have approached the government for setting up of a fund for the shipping industry as all channels to secure debt has evaporated," Shipping Corporation of India Chairman and Managing Director S C Hajara told PTI.
The domestic shipping industry finds it difficult to raise money from the global market on account of the worldwide liquidity crisis. Also, many foreign banks prefer giving loans to shipping projects based in their respective countries.
"Many western banks have received loans from their respective governments. The government nominees in these banks insist on giving loans only to projects in their countries," he said.
The Indian shipping industry would have to invest $20 billion in the next few years to modernise its fleet and acquire new vessels.
Domestic shipping firms like to raise funds abroad, preferably Europe, due to the lower interest rates and long-term repayment norms.
Indian banks and financial institutions do not have an appetite to lend to shipping companies, Hajara said. With no global finance and no domestic finance, raising debt for Indian shippers have become difficult, he said.
