Alphard Maritime Group Announces $500 Million Shipping Fund in Gujarat’s GIFT City to Strengthen India’s Shipping Tonnage
In a significant development for the Indian shipping industry, Alphard Maritime Group, a leading global player in the maritime sector, has unveiled plans to establish a $500 million shipping fund at Gujarat’s International Finance Tec-City (GIFT City). This initiative, revealed during the ‘Global Ports and Shipping Summit’ in Mumbai, is set to provide a much-needed boost to India’s shipping tonnage. Captain Alok Kumar, Chairman and Promoter of Alphard Maritime, announced the fund’s potential to revolutionize the landscape for Indian fleet owners.
Empowering Indian Fleet Owners
The core objective of this fund is to support Indian fleet owners in acquiring shipping assets, especially those within the $10-20 million range. Alphard Maritime will contribute Rs 5 billion ($60 million), while its associates are expected to invest an additional Rs 45 billion ($540 million). This combined effort will create a robust financial mechanism for fleet owners to expand their capacity and enhance India’s shipping fleet.
According to Capt. Alok, “Once operational, the fund will enable Indian shipping tonnage. We aim to help Indian shipping companies grow and become competitive in the global market.” This marks a strategic move towards making India a significant player in the global shipping arena, especially at a time when the country’s maritime sector is being primed for growth.
GIFT City – The New Hub for Ship Leasing
GIFT City, India’s first International Financial Services Centre (IFSC), located in Gujarat, has rapidly become a key destination for companies exploring ship leasing and other maritime financial activities. The unique regulatory framework of GIFT City, coupled with attractive tax incentives, has drawn several shipping firms seeking innovative ways to finance ship acquisitions and build capacity.
Alphard Maritime is among a growing number of firms leveraging the advantages offered by GIFT City. Ship leasing, a relatively new concept in India, is gaining traction due to its potential to address the challenges faced by Indian shipping companies. Capt. Alok underscored the importance of GIFT City in driving the industry forward, stating, “It makes economic sense to come through GIFT City, and once more transactions occur, the initial issues will be resolved.”
The combination of GIFT City’s infrastructure and Alphard Maritime’s ambitious shipping fund could create a synergistic effect, leading to substantial growth in India’s shipping tonnage. Additionally, the financial flexibility offered by GIFT City, particularly through its tax exemptions, makes it an ideal hub for domestic and international shipping players to operate.
Supporting India’s Domestic Shipbuilding Industry
The Indian government has recently placed a strong emphasis on revitalizing the domestic shipbuilding industry, offering various financial incentives to local shipyards. Alphard Maritime, recognizing this opportunity, has expressed a keen interest in supporting the sector from the ground up. This aligns with India’s broader goals of enhancing domestic manufacturing capacity under the ‘Make in India’ initiative.
Capt. Alok highlighted the importance of supporting the shipbuilding industry early in its development. “We are committed to assisting the Indian shipbuilding sector in any way we can, whether through financing or by creating demand for ships built locally,” he said.
By providing fleet owners with access to capital through the shipping fund, Alphard Maritime aims to make it easier for them to invest in new ships, particularly those built in India. This will not only enhance the country’s shipping tonnage but also create more jobs and stimulate growth in related industries such as ship design, engineering, and manufacturing.
Challenges and Solutions: Addressing Regulatory and Operational Hurdles
While the establishment of the fund is a major step forward, Capt. Alok also identified certain regulatory challenges that need to be addressed to fully realize the potential of GIFT City as a global shipping hub. One of the key obstacles is the lack of a dedicated infrastructure for ship registration and certification within GIFT City itself. Currently, these processes can take up to a month in India, compared to just two hours in some international jurisdictions.
To overcome this, Capt. Alok proposed two possible solutions. First, GIFT City could develop its own infrastructure for ship registration and certification, which would streamline the entire process and make it easier for shipping companies to operate. Alternatively, a local office of the Directorate General of Shipping could be established within GIFT City to expedite the necessary clearances and certifications.
Additionally, Capt. Alok pointed out that Indian banks currently do not have dedicated shipping desks, which adds to the financial challenges faced by fleet owners. He recommended that Indian banks create a specialized fund for the shipping sector, ensuring that shipowners have easier access to financing.
Collaboration with PwC and European Lenders
The development of the $500 million shipping fund is being done in collaboration with PwC, one of the world’s leading professional services firms, which will provide its expertise in financial structuring and management. The fund is also backed by European lenders, many of whom already have strong business ties with Alphard Maritime. This partnership with established international financial institutions is expected to lend credibility to the fund and attract further investment from other global players.
Incentivizing Domestic Shipbuilding Through Long-Term Contracts
Capt. Alok also called for greater involvement from state-owned enterprises in supporting the domestic shipbuilding industry. He suggested that companies like the Oil and Natural Gas Corporation (ONGC) could offer long-term contracts (ranging from 10 to 15 years) for offshore vessels. These long-term agreements would provide fleet owners with the confidence to invest in building ships domestically, despite the higher costs associated with local construction due to Goods and Services Tax (GST) implications.
He explained, “Long-term contracts would assure fleet owners that their investment in domestic shipbuilding would be worthwhile, even if the upfront costs are higher. This would create a virtuous cycle, where increased demand leads to more shipbuilding and, in turn, greater capacity for the Indian maritime sector.”
A Strategic Move for India’s Shipping Future
The announcement of the $500 million shipping fund by Alphard Maritime represents a strategic push to elevate India’s position in the global shipping industry. With GIFT City as its base, the fund is poised to address several of the challenges faced by Indian fleet owners and shipbuilders, while also attracting international investments into the country’s maritime sector.
Capt. Alok’s vision for the fund is clear: to create an enabling environment for Indian shipping companies, helping them grow and compete on the global stage. He concluded his address at the summit by reiterating his belief that GIFT City will play a pivotal role in India’s maritime future, stating, “As more transactions take place, we will overcome the initial hurdles, and GIFT City will emerge as a critical hub for global shipping finance.”
With the strong backing of Alphard Maritime, PwC, European lenders, and the Indian government’s policy framework, this ambitious initiative could significantly contribute to the growth of India’s shipping tonnage and shipbuilding capacity, positioning the country as a key player in the global maritime economy.
