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Amit Mitra

In the last fiscal, the share of Indian lines carrying the country's overseas trade tumbled down to 17 per cent from 28 per cent and 31 per cent in 2001-02 and 2000-01 respectively.

Mumbai Sept. 26

THE country's dependence on foreign ships to carry its overseas trade has been increasing, focusing the need for the Indian shipping industry to shore up its fleet strength to adequately support the country's trade.

The need comes into sharper focus when seen from the perspective of the drain of foreign exchange in the wake of foreign ships taking away a major chunk of country's overseas trade.

In the last fiscal, the share of Indian lines carrying the country's overseas trade tumbled down to 17 per cent from 28 per cent and 31 per cent in 2001-02 and 2000-01 respectively.

However, as Mr P.K. Srivastav, Chairman of Shipping Corporation of India (SCI) and President of the Indian National Shipowners Association (INSA) points out, one has to take into account the fact that the total volume of India's overseas trade has also burgeoned.

According to the latest INSA's annual review 2003, which was released on Thursday, the total volume of India's foreign trade has increased from 244.33 million tonnes to 273.04 million tonnes last fiscal, representing a 1.7 per cent rise. However, the volume of cargo carried by Indian ships slipped down from 54.86 million tonnes to 46.86 million tonnes last fiscal.

The report points out that "this trend indicates the increasing drain of foreign exchange by way of payment of freight to foreign ships. The trend focuses the attention on the inadequacy of the national fleet to support the country's trade."

Just how important is shipping services as a valuable foreign exchange earning asset of the country is indicated by the fact that despite the decline in growth of Indian fleet, the foreign exchange earnings/savings of Indian ships has risen sharply from Rs 6,902.36 crore in 2000-01 to a record Rs 7,440.47 crore in 2001-02.

As a matter of fact, an analysis of the estimates of freight payments for imports published in the Unctad Review of Maritime Transport 2002 indicates significant variations in the freight cost ratios among the developing and developed maritime countries. As against 6.21 per cent freight cost of the total CIF import value in the world trade as a whole in 2000, the share of freight costs in the imports of developing countries was at 8.83 per cent, almost double that of the developed market economy countries at 5.21 per cent. "This aspects assumes significance in our national efforts towards development of the strength of the Indian fleet," the INSA review points out.

However, according to the review, the share of Indian ships in terms of volume of shipment of Transchart cargo increased from 6.47 million tonnes to 15.53 million tonnes last fiscal. This is mainly on account of increase in import of crude oil arranged through Transchart. In percentage terms, the share of Indian ships in the overall movement of Transchart cargo in the last year increased to 32.12 per cent from 23.37 per cent in the previous year.

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