Indian shipping tonnage crosses 9 million GT
Shipping tonnage growth under the Indian flag is zooming. It has notched a record of 9.07 million gross tonnage (GT) as on August 31, 2007, figure which could well surpass the targeted 12 million GT by the end of the eleventh Five-Year Plan period.
By TNN |
Shipping tonnage growth under the Indian flag is zooming. It has notched a record of 9.07 million gross tonnage (GT) as on August 31, 2007, according to figures released by the shipping ministry. This figure could well surpass the targeted 12 million GT by the end of the eleventh Five-Year Plan period.
Analysts assign this phenomenon to the buoyant freight market conditions, which catalyses the pace of growth. This was because there was significant tonnage increase of 0.48 million GT during the last five-month period alone, which has gone up from 8.59 million GT as on April 1, 2007 to 9.07 million GT on September 1. In comparison, there was only an increase of 0.13 million GT during the last fiscal, starting from April 1, 2006 (8.46) to April 1, this year (8.59). Tonnage during the ten-year period from April 1996 to April 2006 the increase was only 1.37 million GT. (On April 1, 1996 it was 7.10 and in April last year it was 8.47).
There are two factors responsible for this trend,” says Anil Devli, executive director of Shreyas Shipping & Logistics. “World tonnage is booming and one can see the movement of a lot of cargo out of India. Huge investment is also being made mostly in bulk and tanker side, while at the same time many new buildings are being taken delivery of. Besides, the rate for capsize is at $100,000 per day, thus making charter hire a very lucrative business. This trend will definitely continue for another 1½ years at least.”
Adding a word of caution, a spokesperson for Indian National Shipowners’ Association (INSA) said, “The industry still pays 12 different taxes and duties on shipping alone. Hence, this does not put us on par with global shipping vis-à-vis our other competitors. To achieve a target of 12 million GT (approximately 955 vessels) at the end of the next 5 years would involve a further addition of 404 ships of 6.16 million GT to the Indian fleet over and above the new acquisitions / replacements of 560 ships of 4.67 million GT.”
Because of insufficient support from the government, the shipping industry finds little value for Indian cargo. Some Indian ship-owners have been flagging out their vessels to their subsidiaries abroad or to other flags of convenience.
As there is no price benefit for Indian cargo, but only purchase benefit, Indian shipping companies are at a disadvantage. Unless subsidies are given and exemption from certain taxes, including service tax - which foreign shipping lines are exempted – are provided Indian vessels will continue operating in (foreign) cross trade. “The government needs to enhance the brand value of the Indian cargo and adopt an India-centric cargo policy,” says Mr Devli.
Analysts assign this phenomenon to the buoyant freight market conditions, which catalyses the pace of growth. This was because there was significant tonnage increase of 0.48 million GT during the last five-month period alone, which has gone up from 8.59 million GT as on April 1, 2007 to 9.07 million GT on September 1. In comparison, there was only an increase of 0.13 million GT during the last fiscal, starting from April 1, 2006 (8.46) to April 1, this year (8.59). Tonnage during the ten-year period from April 1996 to April 2006 the increase was only 1.37 million GT. (On April 1, 1996 it was 7.10 and in April last year it was 8.47).
There are two factors responsible for this trend,” says Anil Devli, executive director of Shreyas Shipping & Logistics. “World tonnage is booming and one can see the movement of a lot of cargo out of India. Huge investment is also being made mostly in bulk and tanker side, while at the same time many new buildings are being taken delivery of. Besides, the rate for capsize is at $100,000 per day, thus making charter hire a very lucrative business. This trend will definitely continue for another 1½ years at least.”
Adding a word of caution, a spokesperson for Indian National Shipowners’ Association (INSA) said, “The industry still pays 12 different taxes and duties on shipping alone. Hence, this does not put us on par with global shipping vis-à-vis our other competitors. To achieve a target of 12 million GT (approximately 955 vessels) at the end of the next 5 years would involve a further addition of 404 ships of 6.16 million GT to the Indian fleet over and above the new acquisitions / replacements of 560 ships of 4.67 million GT.”
Because of insufficient support from the government, the shipping industry finds little value for Indian cargo. Some Indian ship-owners have been flagging out their vessels to their subsidiaries abroad or to other flags of convenience.
As there is no price benefit for Indian cargo, but only purchase benefit, Indian shipping companies are at a disadvantage. Unless subsidies are given and exemption from certain taxes, including service tax - which foreign shipping lines are exempted – are provided Indian vessels will continue operating in (foreign) cross trade. “The government needs to enhance the brand value of the Indian cargo and adopt an India-centric cargo policy,” says Mr Devli.
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