The plea of Indian shipping companies for a cargo reservation policy, that would have allowed Indian flag vessels to ferry a majority of import and export trade commodities, has been rejected by the government. According to APVN Sarma, secretary-shipping, Government of India, ?There is no point in coming up with a cargo reservation policy, as it doesn?t happen globally.?
The share of Indian flag vessels in the carriage of India ?s international cargo was as high as 40% in the 1980s but at present, it is just 12-13%. Many Indian shipping firms have been raising a request for allowing them preference in India?s exim trade over foreign vessels, and the shipping ministry was exploring the possibility of introducing a cargo reservation policy. The policy initiative was in line with the current freight market turmoil, which is a result of the financial meltdown.
However, Sarma said, ?Such a step will affect Indian companies in turn, as following this, other countries might come up with their own reservation policy, which will prove to be a problem for Indian cargos foreign waters.?
According to Sarma, as a protection measure for the Indian shipping companies, there is the coastal shipping policy. ?Coastal shipping policy is a protection measure for the Indian shipping industry, where only Indian ships are involved in cargo movement. Only when there is a shortage of Indian ships, a special license is given to a foreign shipping company for cargo movement in the coastal lines,? said Sarma. ?In fact, there is an appeal for moving more cargos through coastal shipping, rather than roads and railways,? he added.
?Some sort of protection is required for the Indian shipping industry. The cabotage policy is there, but in that the current policy of first preference to Indian ship owners needs to be tightened up,? commented SS Kulkarni, secretary, Indian National Shipowners Association (Insa).
However, the Indian shipping industry is also making continuous appeal to the government to safeguard the industry against the growing threat of multinationals through measures similar to the anti-dumping duty implemented in the domestic manufacturing sector. Currently, in the absence of such a policy, the foreign players are quoting low freight rates.
?Cargo movement has dried up globally. However, India still has availability of cargos. Hence, foreign shipping lines are entering and tapping the Indian market for cargos, and dumping their vessels. In the absence of some measures similar to the anti-dumping duty, this is proving to be threatening for the Indian shipping lines,? commented S Hajara, CMD, Shipping Corporation of India.
