Directorate General of Shipping, which deals with implementation of shipping policy and legislation, has amended its own order on guidelines for exercise of Right of First Refusal (RoFR) - Grant of Licence to foreign flag vessels dated January 14, 2021. This is to include priority to International Financial Services Centres Authority (IFSCA) owned ships also for chartering of ships through tender.

IFSCA is a unified regulator for international financial services to develop and promote India as a global financial hub based in Gandhinagar, Gujarat. The RoFR is a right, which accrues to a bidder in a tendering process offering a vessel to his matching of the lowest rate offered by a bidder not mentioned in the categories in the amended order.

The addendum dated October 5 was issued after considering developments on permitting shipping operations like sales and lease back, purchase, chartering and operations under the International Financial Services (IFSC), which is constituted under the IFSCA. It was also done incorporating the provision of the Shipping Ministry’s September 9 order on promotion of Make in India initiative, the RoFR for Indian built and Indian flagged ships through amendments to guidelines for chartering of vessels done through the tender process for all types of requirements.

Reducing supply chain disruptions

The early order had only three priorities - (first) Indian built, (second) Indian flagged and Indian owned; foreign built, Indian flagged and (third) Indian owned; Indian built, foreign flagged and foreign owned .

However, the amended order dated October 5 has these priorities- (first) Indian built, Indian flagged and Indian owned; (second) Indian built, Indian flagged and India IFSCA owned; (third) foreign built, Indian flagged and Indian owned; (fourth) Indian build, Indian flagged and Indian IFSCA owned and (fifth) Indian built, foreign flagged and foreign owned.

Madhvendra Singh, CEO at Gujarat Maritime Cluster, in a social media post said, the addendum will provide priority access to vessels and mitigate supply chain disruptions by bringing certainty and consistency. He also thanked the Director General of Shipping for recalling the previous order and notifying the new order for grant of Right of First Refusal priority to IFSCA-owned ships.

Commenting on Singh’s post, Chhavi Rathi, Director, Avlosh Management Institute, said that addendum will help in reduction of vessel turnaround time, and berthing and occupancy of the ships will be faster. Compliance will make the system efficient.

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