Ship leasing activities conducted from GIFT City in Gujarat have more than quadrupled in the last one year, with 17 ships being leased out so far. Ship leasing entities have so far borrowed more than $71.1 million in loans to conduct their operations from this financial enclave, official sources said.
“So far about 17 assets have been leased out of GIFT City where nine ship leasing entities have borrowed $71.1 million for their operations,” K Rajaraman, Chairperson International Financial Services Authority (IFSCA) told businessline during a recent interaction at the IFSCA headquarters.
“Of the total 17 assets, eight ships are Indian flagged and are owned out of GIFT City, while nine ships are foreign flagged and leased out from this enclave. This includes about seven bulk carriers, four oil tankers and six Very Large Crude Carriers (VLCCs),” he added.
VLCCs are among the largest crude carriers typically with a capacity of two million barrels or more.
Ship leasing activities began in GIFT City in June 2023, after MV Ripley Pride, a bulk carrier, became the first ship to be leased by Ripley Shipping India IFSC Pvt Ltd. At the end of March, 2024, there were 11 ship leasing lessors in GIFT City and together they had leased just four ships. The number of leasing entities have now risen to 16 with total leased assets rising to 17. In the last financial year alone, Japan’s Mitsui OSK, Poseidon Leasing IFSC Ltd, Shipping Corporation of India and Reliance Industries Ltd are some of the companies that have opened ship leasing entities in GIFT City.
DP World is the latest entity to have applied to the IFSCA for setting up a ship leasing unit. The new entity DP World Marine IFSC Pvt Ltd plans to undertake ship leasing activities from GIFT IFSC, official sources said. A mail sent to DP World in this regard remained unanswered.
A ship lessor in the GIFT IFSC is permitted to undertake transactions including sale, lease back, purchase, novation, transfer, assignment and other similar activities in relation to a ship lease. Entities can also engage in voyage charters, contract of affreightment, employment in shipping pools and all other legal commercial transactions for employment of ships. They can also offer asset management support services for assets owned or leased out by the entity or by any of its group entities set up in the IFSC in India.
As of April 2024, the global ship leasing market was estimated at $15 billion. The North American region inclusive of the U S, Canada and Mexico dominates this market, occupying 38 per cent of the share. Europe and Asia Pacific region occupies 30 and 24 per cent of the ship-leasing market.
