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i-maritime News Letter

Concern over declining share of Indian ships in national cargo - 2012-10-12


Unless the Government eases the fiscal burden on shipping firms and extends policy support to acquire more tonnage, their share in the national cargo will continue to slip from the current 8 per cent, said S. Hajara, Chairman and Managing Director of Shipping Corporation of India. Speaking at the two-day ‘India Shipping Summit’, which began here on Tuesday , he said of the country’s annual freight spends of about $40 billion, more than 90 per cent goes to foreign carriers.

This is mainly due to lack of a level playing field. While Indian flag carriers are subject to various taxes, foreign lines are free to come and pick up domestic cargo, he said. Though India allows 100 per cent FDI in shipping, foreign lines are not keen to set up shop here as they will be subject to local levies, said a delegate at the conference. The share of Indian ships in the national cargo has been declining despite an increase in the domestic tonnage. Share of POL cargoslipped to 13 per cent from 17 per cent a couple of years ago.

Despite being the low-cost mode of transport, India has failed to explore the potential of coastal shipping, Hajara said. Referring to the freight markets, he said supply pressure will continue to put pressure on the rates and a recovery could be seen only by end of next year. Yudhishthirn Khatau, Vice-Chairman and Managing Director of Varun Shipping and President, Bimco, said Indian shipping is losing out market share mainly because of the low priority being given to the sector by the Government.

“It is like buying a house or renting it out ,” he said explaining that in the long run having national tonnage will provide a competitive edge to Indian trade.

Source : Hindu Business Line