Distinguished speakers & panelists,
Members of the Maritime fraternity,
Ladies and Gentlemen,
It’s a pleasure to be a part of the 50th National Maritime Day Seminar. I am proud to join you in celebrating National Maritime Day, which, as you already know, began 50 years ago.
I would like to congratulate the NMDC organizers for this year’s theme – “Last 50 years of Indian Shipping – Introspection and Way Ahead”, which I believe is a pertinent theme for us to reflect on our past and determine our future.
The Indian shipping industry has come a long way from 0.19 million GT during the pre-independence era to having crossed the 11 million GT mark last year. There has been a phenomenal growth in cargo handled at Indian ports, from 19.38 MT in 1950-51 to 930 MT in 2011-12. Indian companies have diversified into various segments of shipping, right from the small offshore vessels to the large VLCCs; from the simpler tugs to the specialized gas and chemical carriers. Though we have come a long way, it’s important for us to introspect on the challenges and opportunities that lie ahead.
Keeping in mind India’s 7,500 km coastline and 14,500 km navigable inland waterway system, it’s fair to say that India’s waters are one of her most untapped and under-utilized natural resources.
The shipping industry plays a major role in India’s international trade, considering that a majority of goods – 90% by volume and 70% by value – are transported on seas. Indian trade has grown significantly and now constitutes about 8% of total world trade in terms of volume. However, our shipping fleet accounts for just 1.2% of world tonnage. The share of Indian tonnage in India’s overseas trade has come down substantially from about 40% in the 1980’s to less than 8% today. Therefore, our dependence on foreign flags has only increased.
India also happens to be the world’s second largest liquid bulk importer. In 2011, India imported over 160 million tons of crude oil by sea from about 32 countries. We are also importing large quantities of chemicals, including vegetable oil. The shipping industry is a critical pipeline that connects India to the world, and less than 10% of that pipeline is Indian owned. This is a national security challenge as well as an economic one.
I recently visited Panama along with the Secretary, Ministry of Shipping and DG Shipping. It was impressive to see that 30% of the world’s flags are registered in Panama, which has a population of only 3.5 million people. What they have done very successfully is leveraged the 77km long Panama Canal to convert themselves into a global maritime hub. They have some of the world’s finest ports on both, the Pacific and Atlantic sides of the canal, one of the world’s first Free Trade Zones and an attractive registry policy that has attracted the global shipping industry. They are actually much more than just a gateway to the ‘Americas’. In fact, although their economy is largely dependent on the maritime sector, which is facing tough times today, they are still growing at 10% every year.
Given India’s strategic location along major shipping routes, our vast coastline and maritime history, there’s no reason why we shouldn’t aspire to become a global maritime hub with the best ports, shipping registry services, shipping companies, shipyards and of course, seafarers. To achieve growth in each of these areas, it’s important that the Government of India, State Governments, shipping industry, shipbuilding industry, logistics industry and other stakeholders enhance cooperation and coordination amongst themselves. This is also critical in order to strengthen India’s coastal security, vessel traffic management and environmental preservation efforts. In fact, we must expand our cooperation to develop an economic strategy in conjunction with other state and central ministries that deal with road and rail transportation, infrastructure and logistics. Unlike the telecom industry which I also represent, the shipping industry in India is far more united. This gives me confidence that we can achieve this objective.
The global economy is still reeling under the pressures of the financial crisis of 2008. This has obviously impacted global trade, and the first industry to get hit hard is always the shipping industry. In an effort to propel confidence and growth in the country’s shipping industry, the Government of India, through the Ministry of Shipping, announced the Maritime Agenda for the period 2010-2020. This agenda hopes to steer the Indian maritime sector into calmer waters and will hopefully allow us to transform India into a world leader in shipping.
To encourage fleet growth under Indian flags, the Union Budget 2013-14 provides full exemption from excise duty and CVD on acquisition of ships. Similarly, the announcement of two new greenfield Major Ports will help ease port congestion.
We are also working to provide other incentives to the shipping industry and seafarers, attract investments in the port sector and National Waterways, increase port capacity and efficiency, and to develop our lighthouses, scattered across our coastline, into tourism hubs.
India has 12 Major Ports and about 200 non-Major Ports. The share of cargo handled by non-Major Ports, or private or State Government ports, is about 45%. Here, tariffs are being determined by market forces. However, in the case of Major Ports, tariffs are being fixed by TAMP. There is clearly a need to bring about a level playing field in the port sector. This will allow more port capacity to be built at a quicker pace, efficiency and quality levels will improve significantly, and its a ‘win-win’ for government and industry.
The Ministry of Shipping is moving towards allowing market dynamics to determine tariffs in all Major Ports of the country. This will deregulate tariffs at Major Ports in line with international best practices and is one of the government’s biggest economic reforms. I am happy that industry has responded positively to these proposals and I look forward to working with industry to achieve unprecedented growth in this sector for the next several decades to come.
During my last six months as the Minister of State for Shipping, my confidence about India’s prospects in global maritime trade has only increased. We are trying our level best to not only respond to the present challenges faced by industry, but also to chart out a strategy that will keep us ahead of competition, especially during difficult business cycles.
I also want to take this opportunity to wish our seafarers in advance on the occasion of ‘Seafarer’s Day’ which falls on June 25th. It’s important to recognize and laud the invaluable contribution made by our seafarers, often at great personal costs to themselves and their families. Their welfare and safety will always remain a priority for us.
Once again, it’s a pleasure to be here today. I would like to congratulate the organizers and wish all the stakeholders my very best.
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