Bangalore: A government panel has recommended further restrictions on allowing foreign ships in Indian waters, after months of lobbying by local shipowners.
India is expected to announce new rules in this regard this week.
Coastal shipping is reserved for India-registered ships. Foreign ships can be hired with the permission of the maritime regulator only when Indian ships are not available.
The new rules suggest that if Indian ships are not available, preference would be given to an Indian company that’s building a ship which would be ready and registered as an Indian ship before starting the contract.
The next preference would be a foreign ship being purchased by an Indian entity and converted into an Indian-registered ship before commencing operations.
Director general of shipping Lakshmi Venkatachalam said last week on the sidelines of a shipping meet that her directorate is examining whether the suggestions are in line with the Merchant Shipping Act.
With the shipping market collapsing after the global meltdown, local shipowners have been clamouring for protection saying the current rules on coastal trade have not been enforced strictly.
“Every segment of coastal trade should be served by Indian registered ships,” S. Hajara, president of the Indian National Shipowners Association, said at the summit held in Mumbai. Hajara is also the chairman and managing director of Shipping Corp. of India Ltd, the country’s largest shipowner.
The panel was headed by maritime lawyer S. Venkiteswaran. Mint has reviewed a copy of the report.
“The new rules will lead to delays and higher costs for end use customers,” said an industry expert, who did not want to be named because of the sensitive nature of the issue.
India’s oil refiners, offshore oil and gas explorers, port developers and logistics companies—the main users of coastal shipping—will be hit by the new rules, said another industry executive, who also requested anonymity.
These users were not part of the Venkiteswaran committee, which included representatives from shipowners.