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Amit Mitra

Given this age profile, it has been estimated that over 60 per cent of the fleet needs to be replaced within a next about five years.

Mumbai , Sept. 30

OLD age problem may soon confront the Indian shipping fleet.

Lack of adequate fresh tonnage addition due to a variety of problems has resulted in a gradual deterioration of the Indian shipping fleet in terms of age profile and unless the trend is reversed, foreign vessels may elbow aside Indian ships to grab a bigger chunk of the country's overseas trade.

According to a report by the Indian National Shipowners Association (INSA), the average age of the Indian fleet till April this year was 16.5 years. "The age profile of the fleet however is gradually deteriorating, as in terms of DWT over 31.7 per cent of the fleet, totalling 80 ships of 2.91 million DWT, is over 20 years of age, while another 29.3 per cent is between 15 and 19 years," the report points out.

Given this age profile, it has been estimated that over 60 per cent of the fleet needs to be replaced within a next about five years. As a matter of fact, even the Planning Commission's Working Group on Shipping has recommended that during the Tenth Plan period (2002-2007) about 156 ships of 3.25 million GRT had to be acquired by the shipping industry so as to maintain the fleet strength at about 7 million GRT. Shipping analysts feel that there is a pressing need for the Government to take on the role of a facilitator and create opportunities for a healthy business climate to attract fresh investments in the shipping sector.

While a majority of the world shipping fleet enjoys a low tax regime, the high level of taxation in India continued to stymie addition of tonnage. Despite significant improvement in the trading environment last fiscal, the strength of the Indian fleet slipped from 11.20 million DWT as on March 2002 to 10.06 million DWT as on March 2003. Interestingly, despite the fall of 1.14 million DWT in total tonnage, the number of ships rose from 560 to 616— this is because of the inclusion of large number of tugs, survey vessels and pilot vessels owned mainly by the port trusts and the State Maritime Boards.

However since April this year, the Indian fleet has shown some signs of recovery. By July end, the fleet increased to 10.51 million DWT, in the wake of the addition of seven oil tankers to the fleet— three by Shipping Corporation of India, two by Great Eastern, one by Mercator Lines and one by India Steamship Co. In addition to these some more new tankers and VLCCs have been ordered recently by different companies.

One trend that continues to cause concern among shipping circles is the tardy growth in container services. "The pace of development of containerisation of goods in India appears poor when compared with world standards. Whereas in the developed countries about 70 to 80 per cent of general cargo has been containerised, in India the figure still hovers around 50 per cent," the INSA report says.

In fact, the share of Indian lines in the carriage of India's containerised cargo is even more "pathetic" at an "abysmally" low level of less than 5 per cent. Except for SCI, Shreyas Shipping and to a certain extent Shahi Shipping, no other Indian shipping company operates in the container trade.

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