Bangalore: Malaysian tanker operator AET Tanker Holdings Sdn Bhd has become the first global shipping company to register a ship in India, nine years after the country opened its doors to 100% foreign direct investment in shipping.
On Thursday, the Directorate General of Shipping (DGS), India’s maritime regulator, granted registration to one of AET’s ships, a few months after the company had applied for an Indian registration.
AET’s petroleum products tanker named Eagle Meerut has been granted an Indian registration, an official at DGS said. An AET executive confirmed the development. Both officials spoke on condition of anonymity.
AET, the oil shipping arm of Malaysia’s state-run shipping firm MISC Bhd, wants to expand into India to take advantage of the potential for shipping in the world’s second-fastest growing major economy. “Exploring the opportunity to flag an AET vessel in India is a logical extension to AET’s considerable investment in India,” Paul Lovell, head of corporate communications at AET, had earlier told Mint.
Local laws: The port at Chennai. The arrival of AET on the scene will intensify competition for carrying petroleum products along the coast. Hemant Mishra / Mint
In the last 12 months, AET has invested heavily in new offices and staff to enable its Indian operations to function on a par with its other global hubs in Malaysia, Singapore, the US and the UK, he had said.
India’s coastal trade—shipping cargo between different locations within India—is reserved for Indian-registered ships and foreign ships can be hired only when Indian ships are not available after taking permission from DGS. To comply with local laws, AET has opened an Indian subsidiary to be able to own and operate ships along the coast. An Indian registration will now entitle the AET ship to get a licence to trade along the coast carrying domestic cargo.
The arrival of AET will intensify competition for carrying petroleum products along the coast, according to a Mumbai-based shipping analyst who declined to be named.
The coastal oil shipping business, worth around Rs1,000 crore a year, is currently dominated by four local shipowners—Great Eastern Shipping Co. Ltd, Mercator Lines Ltd, Pratibha Shipping Co. Ltd and state-run Shipping Corp. of India Ltd,
Local refiners, such as the state-owned Indian Oil Corp. Ltd, Hindustan Petroleum Corp. Ltd and Bharat Petroleum Corp. Ltd, have hired some 24 ships for periods ranging from one to two years to transport petroleum products along the coast.
Apart from setting up an office in India to conform to the country’s coastal shipping laws, AET has regional offices located in Chennai, Mumbai and Gurgaon in Haryana that also provide crewing and staffing services for the petroleum shipping company’s tankers. AET employs at least 400 Indian officers and 300 Indian sailors on its ships.