Shipping: Will domestic fleet reach 43 mt by 2019?
Current norms require India-based shipowners fly Indian flag. That law prevents access of capital for the majority of Indian shipping firms
In December 2014, India’s deputy shipping minister Pon Radhakrishnan announced in Parliament plans to grow the domestic shipping fleet from 10.3 million tonnes (mt) to 43 mt by 2019. Has the fleet grown at the required pace to meet his target? The answer is no. As an Indian, I would feel proud if the Indian-controlled fleet grew to that level. Having said that, it will be impossible to raise the funds required to grow the local fleet to that level in the current environment. Or at least, foreign financiers, who do the heavy lifting in terms of providing capital to Indian shipping companies today, are unlikely to support that level of growth in the Indian fleet. Major changes are required and I shall highlight some of them below.