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Can India Match Vietnam’s Maritime Success Without Financial Reform?
Articles- Jul 15,25
While India has announced major initiatives to boost its maritime sector, many challenges continue to stall growth and innovation in shipbuilding. This article explores Vietnam’s financing model and the urgent lessons India can draw from it.
India, with a 7,516.6 km coastline and over 200 ports, is the 16th largest maritime nation globally. It has access to major sea routes, rapidly developing port infrastructure, and a vast, skilled maritime workforce. However, India’s maritime sector continues to face critical weaknesses like heavy dependence on foreign ships for international trade, limited access to vessels, and lack of support from the Indian banking system. In contrast, Vietnam has developed ship-financing mechanisms through public and private banking partnerships. That has maintained balance to create an ecosystem of ports and fleets.
The Indian government has taken several steps to revive domestic shipbuilding and port modernization. In the Union Budget 2025, it launched a Rs 250 billion maritime development fund (MDF). It also revamped the Shipbuilding Financial Assistance Policy (SBFAP 2.0), allocating Rs 180.90 billion in subsidies and extending customs duty exemptions for shipbuilding. Despite these initiatives, India’s maritime sector still struggles to access timely and affordable financing. Many shipbuilding SMEs and operators find themselves caught in a credit bottleneck, unable to scale or innovate due to a lack of capital access.
Vietnam’s model: Why it's sailing ahead
Pushpank Kaushik, CEO & Head of Business Development (Subcontinent, Middle East and Southeast Asia), Jassper Shipping, says, “Vietnam has created a clear roadmap for its maritime industry. Its port handled more than 750 million tonnes of cargo in 2023, and the country has over 970 registered vessels. MSB (Maritime Bank) was created with a specific focus on marine trade and vessel financing. A large part of its progress is backed by a well-integrated financial system.”
Two major financial pillars of Vietnam's maritime industry are:
- Vessel financing schemes: Vietnamese banks offer specialized vessel financing with low interest rates and extended repayment periods, making it easier for shipowners and shipbuilders to develop and grow.
- Partnership with Government: Banks and government agencies actively collaborate to co-finance infrastructure such as small ports and shipyards.
Where Indian banks are falling short
Pushpank Kaushik further highlights that the Maritime sector in India lacks support from Indian Banks and financial institutions. He notes the following challenges:
- High capital costs and short-term loans: Indian banks often offer loans with high interest rates and short repayment periods, making them unsuitable for long maritime projects.
- Weak tie-up with global institutions: Vietnam’s private banks, such as MSB (Maritime Bank) have partnered with global institutions like OPEC fund to channel approximately 3.30 billion loan for the maritime industry. Whereas Indian private banks are largely absent in these opportunities.
- Gap in Insurance: India’s marine insurance ecosystem is dominated by few insurance companies with offering only standard cargo and hull coverage, In contrast, Vietnam has a diverse insurance landscape and detailed offering in insurance.
What needs to be changed?
Pushpank Kaushik suggests the following initiative that could transform India's maritime sector by improving vessel financing. This would not only benefit the industry but also enhance the country's global standing in this area:
- Maritime-specific financial schemes: Introduce vessel leasing, green bonds and refined long-term credit that match the long-term needs of the shipping industry.
- Accepting Ships as Collateral: With proper legal support, If banks can treat ships as secure assets, it will make it easier for shipowners to access funding.
- Government Partnerships schemes: Work alongside initiatives like the Maritime Development Fund and SBFAP to share risks and extend affordable credit to more players.
- Build Maritime Expertise: Most Indian banks lack understanding of the maritime finance system, making it difficult to evaluate and structure appropriate financial proposals. Setting up in-house teams in banks that understand the shipping business for ease of everybody in question.
The rise of Vietnam’s maritime industry is an example of how a dedicated financial framework, regulatory clarity, and sector-specific banking practices can build a thriving maritime economy. For India, the aspiration to become a maritime powerhouse does not depend only on ports and coastline but on the financial system and support. By embracing maritime as a strategic national priority, India can change its course towards big economic opportunities.
India Maritime Sector
Vietnam Maritime Model
Shipbuilding Finance India
Maritime Development Fund
SBFAP 2.0
Pushpank Kaushik
Jassper Shipping
Vessel Financing Schemes
Maritime Bank Vietnam
Indian Bank Maritime Support
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