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Indian ship owners, seafarers up in arms against govt directive

Tuesday, July 10, 2018
By Raju Vernekar

Indian ship owners and seafarers working on different ships are up in arms against the Union Shipping Ministry's new regulation to allow foreign ships to operate in Indian waters without any pre-condition.

Shipping goods from one Indian port to another is known as cabotage. It is governed by the Merchant Shipping Act (MSA), 1958. As per Indian cabotage rules contained in Sections 406 and 407 of the MSA, only Indian-flagged vessels or vessels chartered by an Indian citizen or company, operating under a licence granted by the Director General of Shipping (DG Shipping), were allowed to carry cargo from one Indian port to another Indian port.

Foreign-flagged vessels were permitted to carry cargo only if Indian-flagged vessels were not available; that too if the DG Shipping received a No Objection Certificate (NOC) from the Indian National Ship owners' Association (INSA), a Mumbai-based trade association. However, now this restriction has been relaxed and ships with foreign flags are now required to obtain a licence under Section 407 of the MSA to operate in Indian waters.

This decision is likely to result in major gains for companies which own and operate private ports in India, engaged in the import coal and agricultural products. Foreign-flagged ships can transport cargo within the country if they obtain a licence from the DG Shipping.

“This is the latest move in a policy tussle going for many years and appears to tilt the balance in the shipping industry and the ports sector in the country hugely in favour of major multinational shipping lines and private port operators to the detriment of Indian shipping companies and government-run ports,” a spokesman for National Union of Seafarers of India (NUSI) said, adding that the move would result in Indian ships losing business and eventually thousands of seafarers, including officers, petty officers and ratings, will all become jobless.

NUSI and the Maritime Union of India, in a memorandum, have urged Prime Minister Narendra Modi to save Indian-flag ships from being wiped out and have also appealed to all Indian seafarers to send log entries to the PMO, urging Modi to withdraw this relaxation in cabotage rules.

INSA too, has opposed the move, arguing that it would potentially undermine the position of the domestic shipping industry in coastal trading.

However, according to official sources in the Union Shipping Ministry, the decision is part of India's plan to promote coastal shipping on a major scale. At present, only 100 Million Metric Tons (MMT) of cargo is moved along the Indian coast and 80 per cent of it comprises petroleum products, coal and iron ore. This move will lead to healthy competition.

There are over 700 Indian Merchant ships engaged in cargo handling and passenger transport. India ranks 15th in the world in terms of total Dead Weight Tonnage (DWT). At present, India supplies around 12.8 per cent of officers and around 14.5 per cent of ratings to the world seafaring community.

Meanwhile, NUSI has decided to launch an agitation which would include steps like blockade of foreign ships in Indian waters.

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