To survive the crisis, the industry has approached the Centre to provide it finances either through Indian banks or set up an exclusive fund for the shipping sector.

“We want the Centre to either set up a separate fund for us or persuade domestic private and public sector banks to lend us for buying ships. The shipping ministry has taken up the matter with the Ministry of Finance,” said captain PVK Mohan, Chairman, National Shipping Board, Government of India.

The Ministry of Shipping is in favour of initially constituting a Rs 10,000-crore (nearly $ 2.5 billion) fund to finance purchase of ships by shipping companies. The fund will be crucial for the sector as finances from foreign banks through the External Commercial Borrowing route have dried up.

At Shiport East 2009, an event organised by the Indian Chamber of Commerce on Tuesday, experts said the biggest challenge that the country’s shipping industry is facing at present is the shortage of funds for their projects.

“All our projects depend on finances from external commercial bodies. We have to rely on mostly American and European banks for debt finance. But the economic crisis has resulted in these banks opting for bail-out packages from their respective governments. Now, with government nominees on their boards, they are lending money only to regional projects and corporations,” said S Hazara, chairman and MD, Shipping Corporation of India Ltd (SCI).