Our Terms & Conditions | Our Privacy Policy
Also, vessel-sharing agreements among container lines operating in India must include a 5% reservation for the movement of domestic cargo ships, as per draft regulations issued by the Directorate General of Shipping.
The new rules aim to boost business for Indian container lines on global routes and help domestic non-vessel operating common carriers, or NVOCCs, find more space on international carrier lines for their clients’ cargo.
NVOCCs typically don’t own or operate ships but act as a point of contact with other cargo carriers for businesses looking to ship their goods.
“The changes, a first by India, have been proposed in the draft notification issued by the Directorate General of Shipping to promote fair competition, enhance transparency, and ensure better representation of Indian shipping lines and NVOCCs in the global container trade, while balancing the interests of all stakeholders in the maritime sector,” said a DG Shipping official who’s privy to the development.
The official said the proposed changes would aid the growth of Indian container lines, which have less than 1% share in the country’s trade basket. The rest of India’s trade is handled by foreign-owned or flagged ships.
Also read | Shipping may get infra tag in boost for shipbuilding, vessel owners
State-owned Shipping Corp. of India, or SCI, India’s largest container operator, would be the biggest beneficiary of the new rules as it proposes to acquire and hire eight large container ships over the next few months.
SCI currently owns about 65 vessels—largely oil tankers and dry cargo bulk carriers—and will benefit from the new rules requiring 5% reservation for the movement of domestic cargo ships.
“The draft would be finalised after getting stakeholder comments by the ministry of shipping in consultation with the ministry of corporate affairs by the end of the month,” said the official mentioned above. “The changes would be applicable for a period of three years with further review to raise mandatory Indian content later.”
The new conditions would have to be followed if a container line seeks exemption from Section 3 of the Competition Act, which prohibits anti-competitive agreements. To promote international trade, India has been giving Section 3 exemption to container liners in blocks of three years since 2012 without any conditions. The new conditions are proposed to be operational until October 2027.
Europe and the US have stronger anti-competition regulations for container lines, the official said.
The ministry of ports, shipping and waterways and DG Shipping didn’t immediately reply to Mint’s queries.
Also read | India eyes port investment deals with global shipping power Greece
A boost for domestic shipbuilding
“This is an excellent move that would facilitate growth of Indian container lines, especially the smaller ones, which stagnated post 2018,” said Anil Devli, chief executive officer, Indian National Shipowner’s Association.
“The move will also allow the country to build its own fleet of container vessels, which would also prevent exporters from facing delays in shipments due to lack of adequate space provided by foreign (container) lines and exorbitant freight charges in times of any global geopolitical event.”
India’s insignificant container fleet presence hampers domestic exports because of limited space on international lines, while countries like China that have a large container fleet manage trade easily using their own vessels and by chartering European container lines, he added.
Also read | India braces for economic strain as West Asia conflict escalates
DG Shipping’s move is also expected to boost the production of shipping containers in India. Mint had reported about a proposed move to institute a production-linked incentive scheme (PLI) for containers to boost domestic production and reduce dependence on imports from countries such as China.
The container shipping industry is dominated by global carriers such as Mediterranean Shipping Company, Maersk, CMA CGM, COSCO Shipping Lines, and Hapag-Lloyd AG.
Indian shipping lines are not present in global container movement, and only a few dozen small container vessels operate in the country. India’s total overseas fleet size is fewer than 500, as per government data.
As per the shipping ministry, India’s major ports handled around 170 million tonnes of containers and 11.4 million 20-foot equivalent units—an industry standard—of container traffic in 2023, about 10% higher than in the year before. But of the more than 22,000 cargo ships that sailed from India’s major ports last year, only about 450 were Indian-registered vessels.
`
Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.
Aggregated From –
Comments are closed.