The Shipping Sector is at Sea

Context: India has lost its global eminence in shipping due to poor legislation and politics even though India is geographically blessed, unlike China which has a great variety of climates and a coast only in the east.

Issues with Indian shipping sector:

• Focus on short term solutions: due to a visionless administration.
  • Led to counter-effective outcomes for India. E.g. Chabahar port in Iran.
  • Shipping infrastructure like ports only helps foreign shipping liners.
  • According to the World Shipping Council, unlike India, China has seven of the top 10 container ports in the world.
• Non-optimised carrying capacity: due to lack of shore-based infrastructure.
  • Increased costs: This has led to increased costs hidden in logistics and transhipment.
  • Discriminatory regulations: Relaxation in “Cabotage” regulation benefits only the foreign container-carrying companies and not Indian shipowners.
• Administrative failure: Allowing similar infrastructural developments in multiple cargo-­handling ports, has led to Indian ports competing for same cargo.
  • Due to various hurdles, the small ship-owning community in India also prefers foreign registry for their ships instead of domestic registration.
• Untapped potential of youth: due to poor skill-base and employment of the creamy layer from management and nautical institutions by the global shipping companies.

Contextual significance of Sagarmala program: aims port-led industrialisation, development of world-class logistics institutions, and coastal community development.

Way forward:

• Develop ports as transhipment hubs: by making major ports cargo-specific, develop infrastructure on a par with global standards, and connect them with the hinterlands as well as international sea routes.
• Develop balanced infrastructure onshore and at sea: will help ensure competitiveness of Indian products by creating competent and cost-effective international supply chain logistics.
• Encourage ship-building and owning in India: The Directorate General of Shipping (DGS) under guidance of the National Shipping Board, should work efficiently to enhance carrying capacity.
• Involving coastal communities within Sagarmala initiative: towards harnessing the century-old ship-owning spirit and sailing skills of peninsular India.
  • Making them ship owners, will initiate cargo by shallow drafted small ships through coast and inland waterways.
  • All minor ports in peninsular India will emerge as contributing ports to the existing major ports and become transhipment hubs independently.