The Indian National Shipowners Association a body that represents 36 Indian shipping companies has estimated that as much as INR 55,000 crore will be needed to replace aging ships in India.
The association will approach the Government with a proposal that the industry be given an interest subvention facility, on the lines of the Textile Upgradation Fund scheme under which, the Government bears a part of the interest burden on loans availed by textile units for upgrading their manufacturing facilities.
Mr Sudhir Rangnekar CEO of Indian National Shipowners Association told Business Line that out of the 9.45 giga tonnes of shipping capacity, about four million tonnes would be needed to be scrapped and replaced by 2012. He said that the order of funding required some help from the Government.
He said that if the Government sets aside INR 400 crore for providing interest subsidy for replacing aging ships, it would facilitate investments of INR 20,000 crore into the industry.
Mr Rangnekar said that world over, coastal routes are reserved for the ships of the respective country, but in India, it is not. He said that such a reservation exists, but only on paper.
Mr Rangnekar admitted that Indian ships are more expensive than foreign ones, but said that was only because Indian shipping companies are heavily taxed. H added that Indian shipping lines will get cargo support if only the Government implements its avowed policy: mandating that imports should be on FOB basis and exports on cost-insurance-freight basis.
Mr Rangnekar said that if this is implemented strictly, then the trader in India would have the freedom to choose the shipping line, and more business would flow to Indian flags.
The association intends to press the Government for intervention in two other major issues reserving coastal shipping for Indian flag and cargo support.
Source : Business Line