MoS to prohibit foreign vessels from plying in coastal trade

The Ministry of Shipping (MoS) of India is drawing up a document to prohibit foreign vessels from plying in coastal trade, it is learnt. The move is actually aimed at the misuse of the coastal trade for terrorist activities, a MoS official said.

According to Exim News Service, at present, foreign vessels can’t operate in those segments of the coastal trade in which a sufficient number of domestic carriers are available. In other segments too, foreign companies have to take permission from the Directorate-General of Shipping (DGS) before starting operations.

This move also follows complaints from the Indian National Shipowners’ Association (Insa) that domestic carriers were losing business to foreign companies.

Coastal shipping accounts for up to 3 per cent of the total tonnage in shipping, and about 50 per cent of this has been estimated as being carried by foreign vessels.

"The Merchant Shipping Act, 1958 allows entry to foreign vessels on a case-by-case basis. However, the contractors often draft the tender in a manner which suits the foreign vessels more than the domestic ones. We want that the national carriers should be given first preference, at least in areas where we have the required capacity," an INSA official said.
This step is in line with the practice followed in several countries like the US, Indonesia and Malaysia. The US has the strictest law on the subject, which requires all commercial vessels transporting merchandise between ports to be built, owned, operated and manned by US citizens and to be registered under the US flag.

"In coastal trade, when other countries have stopped foreign vessels’ entry, we should not be apologetic about doing the same. It is in our long-term interest," the official pointed out.

Till the end of December 2008, the country had 615 vessels for coastal trade. Of these, 11 were dry cargo bulk carriers of 3,62,923 DWT, 12 product tankers of 66,123 DWT and two crude oil tankers of 82, 246 DWT.

(Source: Transport Weekly)