Shipbuilding Dreams Still Docked

DECODE THE NEWS

India’s Shipbuilding Efforts Yet To Take Off Despite Budget Promise

What?

During the Budget 2025, Finance Minister Nirmala Sitharaman in her speech promised a bold new course for India’s maritime sector.

The ambition was the launch of a Rs 25,000 crore Maritime Development Fund (MDF) — a financing lifeline aimed at revitalising India’s stagnant shipbuilding industry and boosting the country’s strategic presence on global waters.

But five months later, that vision has yet to leave the harbour.

Why?

Industry insiders, who had high hopes for the fund, are growing impatient.

“On the Maritime Development Fund, unfortunately, nothing has happened,” Anil Devli, a maritime industry veteran, told The Core.

“It's also rather unfortunate that the ministry is not even sharing any information on this. There have been no consultations… and we thought we could contribute meaningfully to the thought process because we are the users.”

The MDF scheme is stuck somewhere in bureaucratic waters. While the Expenditure Finance Committee (EFC) reportedly gave its nod in April, the Cabinet is yet to approve the final framework.

No guidelines have been published, no stakeholder meetings held, and no funds have been disbursed. This lack of clarity has left stakeholders confused about the fund’s scope — whether it will truly benefit shipbuilders, shipowners, or port infrastructure companies.

There’s also confusion about what qualifies as "infrastructure."

In her Budget speech, Sitharaman had announced that large ships would be classified as infrastructure. But that definition, too, is facing bureaucratic meddling.

What Next?

One reason the infrastructure status hasn’t materialised yet is procedural. According to Shitesh Ranjan, Ship Surveyor and deputy director general from the Directorate General of Shipping, two key changes are required before the MDF can be fully effective.

“There’s a harmonised list of items under infrastructure status. That list needs to be amended by the Department of Economic Affairs (DEA). Then there’s the Master Circular on Loans and Advances, which is issued by the Reserve Bank of India (RBI). Until both are updated, banks won’t finance shipbuilding projects at concessional terms,” Ranjan explained.

Since shipbuilding isn’t currently included, banks can’t treat it as infrastructure and offer soft loans. Unless this list is amended and the RBI updates its lending guidelines, shipbuilding projects won’t qualify for preferential funding terms.

Will the Maritime Development Fund ever set sail—or remain anchored in bureaucratic limbo?

MESSAGE FROM INFLOW

Your career will thank you.

Over 4 million professionals start their day with Morning Brew—because business news doesn’t have to be boring.

Each daily email breaks down the biggest stories in business, tech, and finance with clarity, wit, and relevance—so you're not just informed, you're actually interested.

Whether you’re leading meetings or just trying to keep up, Morning Brew helps you talk the talk without digging through social media or jargon-packed articles. And odds are, it’s already sitting in your coworker’s inbox—so you’ll have plenty to chat about.

It’s 100% free and takes less than 15 seconds to sign up, so try it today and see how Morning Brew is transforming business media for the better.

Check it out

CORE NUMBER

Rs 40,000 crore

That’s how much promoters, private equity (PE), and venture capital (VC) investors have sold in Indian equities just in the first two weeks of June, according to The Economic Times. This sharp sell-off includes Rs 23,820 crore from promoters, Rs 8,500 crore from PE/VCs, and Rs 9,580 crore from Reliance’s Asian Paints exit.

💰 What’s behind the exits?
Massive block deals — from Vishal Mega Mart’s Rs 10,220 crore to Flipkart’s Rs 588 crore in Aditya Birla Fashion and Retail Limited—are profit-taking plays. Analysts from the State Bank of India and investment bank Merisis said these are strategic exits, not panic moves, driven by stretched valuations and fund cycle timelines.

📉 What could it mean?
Nifty Midcap 150 is already down 1.5% in June. Analysts warned this supply overhang could cap market upside, even as domestic institutional investors (DIIs) try to offset outflows.

Air India Cuts Operations: Air India has slashed its international widebody operations by 15% until mid-July. The decision comes in the wake of the deadly AI171 crash, combined with operational challenges, including mandatory safety inspections, geopolitical tensions in the Middle East, and night airspace curfews across parts of Europe and East Asia.

Operational Fallout: The airline has cancelled 83 international flights over six days and is facing cascading delays. Of its 33 Boeing 787s, 26 have cleared DGCA-mandated safety inspections. Checks on the remaining aircraft and the Boeing 777 fleet are ongoing. The cutbacks are aimed at building operational resilience and preventing further last-minute disruptions.

What’s Next? Air India will continue safety inspections on its 787s and begin similar checks on the 777 fleet. A revised international schedule is due by June 20. Affected passengers will be offered full refunds or rescheduling options. The temporary cuts aim to stabilise operations and create buffer capacity amid ongoing disruptions.

StanChart Under RBI Lens: British multinational bank Standard Chartered is facing regulatory scrutiny in India after the Reserve Bank of India (RBI) flagged issues in its sale of derivative products and risk controls, Bloomberg reported.

Catch Up Quick: The RBI is focusing on the bank’s sale of derivative products—contracts often used to hedge risks — which may not have been properly explained to clients. The review also covers how the bank handled its reserves and accounted for trades in past financial years.

Context: While no penalties have been announced yet, the review signals growing regulatory attention on foreign banks’ compliance in India.

Dassault Expands India Manufacturing: France’s Dassault Aviation, maker of India’s Rafale jets, will assemble Falcon 2000 business jets in Nagpur with Anil Ambani-led Reliance Aerostructure—its first such line outside France. This follows Dassault’s recent deal with Tata to manufacture Rafale fuselages in Hyderabad, also a first.

Why It Matters: The twin deals deepen Dassault’s India play and align with the country’s push to localise defence production and boost exports. Global OEMs are increasingly betting on Indian partnerships.

By the Numbers: India’s defence exports rose 12% to $2.76 billion last fiscal. Reliance Infrastructure shares jumped 5% post-news. The first Falcon 2000 delivery is expected by 2028.

A Soft Launch of Layoffs? Amazon’s CEO Andy Jassy sent out a memo to Amazon’s employees on Tuesday detailing how artificial intelligence (AI) agents could change how we work and live. Amazon is rolling out Alexa+, a personal assistant that’s smarter because of AI, and will be introducing AI in shopping as well. 

Flashpoint: Experts see Jassy’s announcement as a premonition – the company could lay off its employees soon. Already, Amazon has let go of thousands of employees – in 2022, the company laid off 27,000. 

Implications: Before this, Anthropic’s CEO said that AI could eliminate 50% of entry-level jobs. Indeed, last year, tech companies in the US had many brutal layoffs and hired a record low (7% in 2024 versus 25% in 2023) number of early-career candidates. Even in India, an IIM-Ahmedabad study found that 60% of white collar workers feared job loss because of AI.

PODCAST

On Episode 610 of The Core Report, financial journalist Govindraj Ethiraj talks Dipti Deshpande, Director and Principal Economist at Crisil.

• War tensions pull down indices again

• Analysts are scratching their heads over oil prices

• Nifty 500 companies have reported single-digit yoy sales growth (+5% yoy) for eight quarters now

• Sebi eases compliance for foreign investors in sovereign debt

• Economists would prefer not to have gold in India’s inflation indices. Here’s why

👥 THE TEAM

✍️ Zinal Dedhia, Salman SH, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas