India plans to set up a. new shipping company to expand its fleet by a minimum of 1,000 ships. in the next years, as Asia's thirdlargest economy looks for a. bigger portion of income from rising trade, 2 government. authorities said.

The South Asian country is investing billions of dollars to. refurbish infrastructure in its race to become a world-class. manufacturer with Prime Minister Narendra Modi, who won a third. term today, aiming for it to be an industrialized nation by 2047.

The yet-to-be-named company will be collectively owned by state-run. companies in the oil, gas and fertiliser industries, which would. offer it with organization, along with the state-run Shipping Corp. of India and foreign business.

India's oil and shipping ministries did not respond to. requests for remark.

The aim is to minimize freight outgoings to foreign companies by. a minimum of a third by 2047, said the sources, who sought anonymity. as they were not authorised to talk to the media.

Existing estimates reveal freight expenses will rise to $400. billion as we improve our exports and imports by 2047, said one. of the sources, who has direct knowledge of the matter.

Indian companies paid freight expenses of $85 billion in the. financial year 2019/20, of which $75 billion was paid for use of. foreign vessels, the source included.

The turn to foreign carriers comes as India's shipping fleet. has not kept pace with its rise in trade, consisting of imports of. energy and exports of refined oil products.

India has a fleet of about 1,500 large vessels including. tankers, gas providers, container ships and dry bulk carriers,. the sources said.

In January India's oil and shipping ministries concurred that. all state-run oil business and the prepared company work. together, a federal government document seen by Reuters revealed.

They would make use of the proficiency of the Shipping Corp of. India in tanker acquisition and ownership, operations and other. areas of shipping, it included.

On May 16, the two ministries formed a joint working group. of government and industry officials to create a roadmap, the. document showed.

The new firm will be based at GIFT IFSC, a monetary centre. in Modi's western home state of Gujarat that aims to contend. with centers such as Singapore by providing fiscal rewards and a. more structured regulatory environment.

It would draw seed capital from a maritime development fund. of roughly 300 billion rupees ($ 3.6 billion) the government. plans to establish in a tie-up with significant port authorities, the. first source stated.

To secure affordable, long-term loans for funding. ship-building, the two ministries want state-run companies to. sign 15-year charter deals with the new company.

That represents a shift from the present practice of reservation. particular trips or one- or two-year charters.

In return the state-run business can also end up being. stakeholders in the new ship owning and leasing entity, the. source included.

The strategy is to combine the government-side freight demand. from other ministries, generally the energy and fertiliser. freights..