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The Centre’s decision to ease the cabotage rule for allowing foreign flag ships to carry a range of cargo on local routes and the move to scrap the right of first refusal (ROFR) granted to Indian ships to carry PSU cargo will dim employment and training prospects for Indian seafarers, according to two top seafarers outfits.
The National Union of Seafarers of India (NUSI), which represents ratings (general purpose staff on board ships) and the Maritime Union of India (MUI), which looks after officers, have urged Prime Minister Narendra Modi and Shipping Minister Nitin Gadkari to “re-consider” the decision to relax cabotage and to desist from scrapping the ROFR given to Indian ships.
“Indian shipping companies employ Indian seafarers on board its vessels without exception. Indian ships are therefore a source of guaranteed employment for Indian citizens,” Amar Singh Thakur, General-Secretary of MUI, wrote in a letter to Modi. BusinessLine has reviewed a copy of the letter.
Thakur said that removing ROFR would “completely cripple” the Indian shipping industry, damaging the employment potential for Indian officers and ratings.
“If this benefit is withdrawn, the one single reason for companies to flag their vessels in India will cease to exist and no investment will be attracted into Indian shipping. This will lead to a decline of Indian flag ships and consequently impact the employment of several thousand Indian seafarers,” he wrote in the letter.
Indian ships are by law mandated to hire only Indian nationals as crew. Besides, the country’s tonnage tax law stipulates that fleet owners have to train 1.5 cadets for every 10 persons employed on a ship per year, spending some ₹16 lakh on training each cadet. Yet, over 5,000 cadets, who have passed out of maritime training institutes, are not employed, as they have not been able to complete the mandatory on-board ship training, according to the shipping ministry.
The lack of employment opportunities has also been hit by a global downturn in the shipping industry since 2008.
Abdulgani Y. Serang, General-Secretary of NUSI, said that the Centre’s decision to ease cabotage was “ill-conceived” given that, among other things, India was a major supplier of quality manpower to the Indian and global shipping industry.
The cabotage rule, according to Serang, gave impetus to Indian shipowners and ensured employment to Indian seafarers.
Indian shipowners and seafarers have always come forward in times of crisis in national interests during Iran-Iraq war and the gulf crisis thereby giving a much-needed security angle also to the imposition of cabotage, Serang wrote in a letter to Shipping Secretary Gopal Krishna.
Allowing foreign ships to ply on local routes would lead to “loss of jobs for Indian seafarers and loss of training opportunities” for Indian cadets as foreign ships are under no statutory obligation to employ Indian crew, Serang told the Shipping Secretary.
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