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There is a need to have a full-fledged, India-owned, India-based protection and indemnity (P&I) entity to reduce the country’s vulnerability to international sanctions and pressures to provide greater strategic flexibility in the shipping operations, said Finance Minister Nirmala Sitharman.
The Minister underscored that P&I will provide protection of liabilities to the ships operating in coastal as well as inland waters during their operations.
“It will also provide a foothold into the specialised segments of P&I business, which is currently dominated by very few players internationally, where presently India doesn’t have a presence. I would think this is a very important area we need to work on,” Sitharaman said, in her address at the Global Maritime Summit.
She observed that Indian P&I services can also help in encouraging and increasing maritime arbitration in the country. Currently, most arbitrations happen either in Singapore or the UK.
“For a country of our size, for the coast line that we have, for the potential in maritime activities that we do have, at least we should start with an arbitration centre in India so that our disputes are redressed here,” the Minister said.
‘Don’t wait for labels’
Referring to the demands from certain quarters that Shipping should be given industry status, Sitharaman emphasised that banks are a lot more dynamic and don’t wait for labels.
“But I see the point. To enhance private particpation in the maritime sector, financing will play a key role in attracting public-private partnership,” she said.
Banks should work together with the shipping ministry on financing, according to Sitharaman.
“I would certainly be working together with public sector banks to start with and then with the others — private sector and foreign banks, with the Shipping Ministry, so that banks tell us where the glitches are, why are they not willing to come forward, is the risk higher than what they can digest or any other issue.
“The Finance Ministry shall work with the banks and the Shipping Ministry to make sure banks understand the needs of the sector and deal with it, not waiting for the “industry” catgorisation,” the Minister said.
Today, Indian banks are in a position to take big ticket exposures, she added.
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