The International Financial Centers Authority (IFSCA) in Gift City is in the final stages of granting approval to Japanese shipping giant Mitsui OSK Lines Ltd (MOL) to set up a ship-leasing entity.

“We are in the final stages of granting a licence to MOL for setting up an IFSC unit for ship-leasing. So now, the total number of ship leasing entities in Gift City has risen to 14,” Dipesh Shah, Executive Director, IFSCA, told businessline about the proposal from the Tokyo-headquared entity. 

MOL had made a formal application in April 2024 for setting up a new unit in GIFT SEZ. The company’s proposal has already been cleared in the recent meeting of the Approval Committee for GIFT-Multiservice SEZ. A final nod from IFSCA is pending. The new entity will be christened M/s MOL Shipping IFSC Pvt Ltd and is expected to take up 100 sq m of office space in Brigade International Financial Centre within GIFT SEZ. The MOL Group has a fleet of 878 vessels.

The number of ship-leasing entities have risen from three in December 2023 to 14 at present However, ship leasing from Gift City is yet to pick up with just four ships leased so far. In July 2023, Ripley Shipping India IFSC Pvt Ltd became the first company to lease a vessel from Gift City. Thereafter, larger companies like Reliance Industries and Adani Group launched their ship-leasing entities.

“GIFT IFSC offers a unique framework for ship leasing and financing, but it’s still in its early stages,” says Pushpank Kaushik, CEO of Singapore-based Jassper Shipping. “One major issue is the low level of foreign interest in ship leasing. The other is maritime contracts as it involves complex legal issues, such as charter parties, bills of lading, shipbuilding contracts, and marine insurance policies. Traditional legal systems may not handle these complexities efficiently. By offering tailored arbitration and dispute resolution services within Gift City, it can become a more attractive global maritime hub, providing parties with greater certainty, expertise, and quicker conflict resolution,” Kaushik added.

IFSC-based shipping companies can lease shipping vessels both in India and overseas. The ship-leasing entities can engage in financial lease, operating lease or a hybrid of financial and operating lease, purchase, sale, transfer, etc of vessels.