Short-sea operator Unifeeder, a part of DP World’s Marine Services Division and India’s Sagarmala Finance Corporation Limited (SMFCL) have joined forces to develop and scale “commercially sustainable” coastal and short-sea shipping services across the South Asian country.
Through the memorandum of understanding (MoU) that the two have inked, representatives from Unifeeder and SMFCL have disclosed that the overall goal would also be to ‘bolster’ India’s multimodal logistics ecosystem and provide the ‘necessary’ push forward to the nation’s low-carbon maritime vision.
The MoU has reportedly laid down the foundation for joint private-public action to design and finance coastal shipping corridors that would support India’s ambition to lower logistics costs, decarbonize transportation and, in turn, decongest roads.
According to DP World, during the initial phase of this initiative, the two partners would seek to jointly examine and lead use cases across shipping corridors, operational performance and DFC integration, as well as to align efforts with national green shipping programs.
As a result, it is expected that this could clear the path toward a ‘commercially viable’ and scalable model that would shift cargo from road to sea and, therefore, minimize emissions across India’s supply chains.
As informed, to this end, SMFCL—which is a government enterprise under the Ministry of Ports, Shipping and Waterways (MoPSW) and the country’s first non-banking financial company (NBFC) in the maritime sector—would use the recently announced Maritime Development Fund (MDF) to design low-cost financing and credit improvement tools.
On the other hand, Unifeeder would contribute its operational knowledge, multimodal infrastructure and digital capabilities.
Per DP World, the bipartite endeavor complements India’s Maritime Amrit Kaal Vision 2047 and the Sagarmala Program , which is MoPSW’s flagship vision kickstarted all the way back in 2015 with the aim of ‘enhancing’ the performance of the nation’s logistics sector.
Over the course of the past year, India has ramped up efforts to rejuvenate its maritime sector. The country’s government revealed in February this year that it would establish the maritime development fund —worth INR 250 billion (about $2.9 billion)—to grow the national vessel fleet and support the domestic shipbuilding and repair sector.
As reported at the time, the government had set out to provide 49% of the financing for the MDF, while the remainder would be covered by private entities, port authorities and financial institutions.
More recently, namely in September, MoPSW unveiled intentions to allocate a staggering ₹697.25 billion (approximately $7.86 billion) to revamp India’s shipbuilding and the overall maritime ecosystem.
As explained, the financing would seek to ‘boost’ the domestic production capacity, improve long-term funding, support greenfield and brownfield shipyard development, ‘enhance’ technical skills and implement legal, taxation and policy reforms to create a “ robust” maritime infrastructure.