India sets eyes on 100 more flagged vessels to cut forex outgo

New Delhi: India plans to add another 100 flagged vessels in the next five years, Union Minister of Ports, Shipping & Waterways (MoPSW), Sarbananda Sonowal said Tuesday. Speaking at the Sagar Samvad called by the National Shipping Board, the minister said this will help cut India’s foreign freight bill.

There are currently around 1,600 domestic flagged ships in the country.

Also read: India opens ports, airports to foreign-bound cargo impacted by Strait of Hormuz disruptions


India pays close to $75 billion every year in freight to foreign shipping lines, according to Shipping’s Minister of State Shantanu Thakur. He noted this is used to move critical crude oil, gas, coal and urea cargo.

Industry representatives present at the event said flying the Indian flag remains 16% to 20% costlier than operating under a foreign one. “This gap was attributed to India's tax on ship imports and maintenance services, tax deducted at seafarers' wages, tax on freight and higher domestic capital costs, expenses foreign competitors do not carry,” the statement said.

The National Shipping Board has proposed a five-pillar roadmap during the event. These cover fiscal reform, assured cargo support, access to competitive financing, regulatory streamlining and improved ease of doing business (EODB).