Flagging of vessels to ease container shortage

Flagging of vessels to ease container shortage

Vijay C Roy

Tribune News Service

Chandigarh, February 2

The government’s decision to provide subsidy to promote flagging of merchant ships in India will ease container shortage in the country. The shortage is due to uneven import-export scenario which has resulted in costs hitting the roof for both shipping lines and exporters.

Every merchant ship needs to be registered in a country of its choice. It is then bound to carry the flag of that country and follow the rules and regulations enforced by it.

“A scheme to promote flagging of merchant ships in India will be launched by providing subsidy support to Indian shipping companies in global tenders floated by ministries and Central Public Sector Enterprises. An amount of Rs 1,624 crore will be provided over a period of five years,” said Finance Minister Nirmala Sitharaman in her Budget speech.

According to the exporters, the subsidy will help in promoting new ventures. “The flagging of merchant ships will ease the availability of containers in the country. In the past, there have been instances when exporters have to wait for months to get the containers,” said SC Ralhan, a hand tool exporter from Ludhiana.

According to the exporters, ocean freight has doubled because of severe shortage of containers and it has started affecting India’s exports of major agricultural products such as rice, cotton and engineering goods. The decline in containers coming from China due to fall in imports from that country has further created shortage of containers.

It is worth mentioning that the Covid-induced lockdown followed by slowdown has led to a sharp drop in imports. Normally, the import containers are used for the exports.

According to the industry, after the lockdown was lifted there had been a surge in industrial activity as the exporters wanted to meet export obligations and this led to a surge in the exports.

As a result, there has also been an increase in container requirement for export of items such as basmati, non-basmati, hand tools, sports goods, leather goods and textiles.

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