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Shipping stocks rally as industry expects Maritime Development Fund, PLI scheme revival in Budget 2024

Shipping and shipbuilding stocks surged as investors anticipate the Union Budget 2024 will boost the sector with a revived PLI scheme, a maritime development fund, and green shipping initiatives.

July 22, 2024 / 21:01 IST
In Budget 2024, the government may launch a maritime development fund with a corpus of Rs 15,000 to 20,000 crore to support shipbuilding firms with low-interest loans

In Budget 2024, the government may launch a maritime development fund with a corpus of Rs 15,000 to 20,000 crore to support shipbuilding firms with low-interest loans

Shares of shipping and shipbuilding firms surged amid expectations of positive announcements for the sector in Union Budget on July 23. The industry expects the upcoming Budget to greenlight the revised production-linked incentive (PLI) scheme for manufacturing shipping-grade containers.

Specific reforms anticipated include increased funding for port modernization and incentives for green shipping practices.

The Centre is likely to revive the PLI scheme for shipping containers, as proposed by the Ministry of Ports, Shipping, and Waterways. This revised scheme, with a reduced budget of Rs 5,000 crore over three years, aims to boost manufacturing after a previous plan was shelved post-cabinet discussions.

Also Read | Budget 2024: Real estate sector pins hope on major policy reforms, budget allocation

What Budget may deliver

The government may launch a maritime development fund with a corpus of Rs 15,000 to 20,000 crore to support shipbuilding firms with low-interest loans, reported CNBC Awaaz. The fund will provide loans to shipbuilding firms at cheaper rates with simple conditions.

The Budget could also see the announcement of a green ship scheme under which the government plans to promote pollution-free hydrogen-based vessels on domestic waterways, according to the report.

The Centre is reportedly planning to replace oil-guzzling ships plying on the Indian rivers with clean vessels by providing incentives under its green ship scheme.

The ministry has proposed a joint venture between the Shipping Corporation of India (SCI) and Indian Oil Corporation for the manufacturing of large oil tankers, aiming to reduce dependence on foreign firms, the CNBC Awaaz report added.

Also Read | Renewable energy boost may continue, more incentives for supply chain eyed in Budget 2024-25

In anticipation of these boosters, shares of Garden Reach Shipbuilders & Engineers (GRSE), Mazagon Dock, Great Eastern Shipping Company, Cochin Shipyard, Shipping Corporation of India, Seamec, Shreyas Shipping and Logistics, and Garware Marine Industries were trading with gains of up to 5 percent.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Harshita Tyagi is a budding journalist on a mission to prove that financial markets and geopolitics can be as entertaining as your favorite TV show
first published: Jul 22, 2024 09:00 pm

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