The government has done away with the licensing permits for foreign vessels for coastal movement of agriculture, fishery and animal produce, besides allowing Indian citizens to charter ships for these, Union Minister Nitin Gadkari said.
The move is also aimed at promoting processing of seafood at Indian hubs under the Sagaramalainitiative rather than processing of Indian seafood in Singapore before further exports to countries like Japan.
“We have done away with the licensing requirement for plying of foreign flag vessels by foreign players on the coastal line of India for four kinds of cargos - agriculture, horticulture, fisheries and animal husbandry. We have also allowed chartering of a foreign vessel by Indian citizens, Indian incorporated entities and registered Indian societies for this,” Shipping Minister Gadkari told news agency PTI.
The primary intent of the government’s reform in the maritime sector is to see that farmers income increases and through lower logistic charges like transportation through sea would reduce costs, the minister said.
It is in continuation of a large number of initiatives that Government of India is taking to increase farmers’ income, in line with the Prime Minister’s objective to double farmers’ income.
The relaxation in licensing requirement has been given under Section 407 of the Merchant Shipping Act 1958 and accordingly vessels with at least 50 percent of total cargo on-board constituted by these commodities are not required to obtain a license from the Director General of Shipping for coastal trade.
“The relaxation has been undertaken to enable farmers to access large market profitability, widen the range of goods to be marketed and lengthen the distance over which domestic trade can be conducted besides promoting trade and ease of doing business in India,” the minister said.
The government has already undertaken the Sagarmala initiative for the port-led development of the country, he added.
Waterborne transportation is cheaper on a per kilometre basis concerning transportation by rail or road and can profitably support the movement of the product to reach broader geography of markets and be monetised, the minister noted.
Currently, the persistence of unidirectional demand leads to insufficient investment in the fleet and as a result low availability of coastal vessels does not allow reliable and time bound services at Indian ports which is necessary for perishable goods, he added.
The minister also said that the initiative would further help in government’s intent of promoting a mindset shift from facilitating and protecting farmers, towards one that expands the market ecosystem.
Shipping Secretary Gopal Krishna told PTI that the move would help farmers as at present South India, where the majority of the cotton mills are located, depends mainly on the road for transportation of cotton from Gujarat, which is costly since it is a seasonal business.
Likewise, wheat can be transported to the South from Gujarat through sea instead of present rail or road.
A shipping association official said many times due to high transportation charges millers in South India prefer to import cotton from countries like Tanzania as it is cheaper to import from there.
The secretary said this creates a huge economic imbalance which goes against our Indian farmers.
From the east coast a lot of seafood goes to Singapore where it is processed and then exported to countries like Japan, he added.
“This could easily be arrested after this relaxation in licensing,” he said, adding that food processing hubs can come up near ports.
Last week, the government had also done away with licensing requirement for ships chartered by Indian citizens or companies for transportation of EXIM containers for transhipment purposes and to promote entrepreneurship.
The move was aimed at arresting diversion of Indian container cargo to transhipment hubs at foreign ports that have been swelled to 33 percent, besides creating employment. At present transhipment hubs at Singapore, Malaysia, Colombo and Jabelali near Indian coastline get about 33 percent of the Indian container cargo, which is aggregated there before shipped to final destinations.
If aggregation is done at Indian ports, jobs will be created, port charges will come and an ecosystem will be developed, Gadkari has said.