One of the areas of Indian maritime industry that have not developed since independence is 'coastal shipping'. There have been many committees formed by the government to look into the problems that have plagued the development of coastal shipping but none could come up with any viable solution. If a methodology of improving coastal trade was given, there was always another authority that came up with impediments. So whenever it was felt that "coastal shipping" would 'take -off' it never did. It just ran aground.  To understand what are the immediate problems of coastal shipping we should look at the Indian laws that govern this sector. To carry cargoes from one Indian port to another port, a ship should have a license. The rules governing the issue of a license come under Part XIV (Control of Indian Ships and Ships Engaged in Coasting Trade) of the Merchant Shipping Act, 1958. So, in effect, all Indian ships must have a license to operate. But can a 'foreign-flagged' vessel carry cargoes (coastal or export-import) from one Indian port to another? Yes, if the Director General of Shipping (DGS) issues a license.
What types of licenses are issued for coasting trades? There are two types - Specified Voyage License and Specified Period License. While a "Specified Voyage License" costs Rs 10000 for a voyage, a Specified Period License costs Rs 1000 per day. So, if a license is required for a year it will cost Rs 3.65 lakh. What are the conditions for issuing a license? There are many conditions but the important one is that of obtaining a No Objection Certificate (NOC). The NOC could be obtained from the Indian Coastal Conference (ICC) but subsequently, this function was handed over to the Indian National Shipowners Association (INSA).  Besides producing an NOC, the applicant will need to submit copies of all relevant statutory certificates, P&I Cover, and a bank draft for an amount depending upon the period for which the license is needed. The period for getting the license can vary from a week to a month.  Let us look at the problems here. The license is always issued to a "ship" and for "specific cargoes" and for "specific quantities". So, if there are 5 ships in a particular liner service then all the 5 ships will need to apply for a license. Occasionally, when congestion of containers takes place in a port, the government grants dispensation against sections 406 and 407, thereby allowing to carry coastal cargoes. However, unfortunately, rarely any foreign ship can make use of this section because the bureaucratic procedures still require the production of a large number of documents. If the government of India desires that more foreign ships should operate on the coast then they should grant general dispensation for a period of 3 to 5 years. Further, the government should clarify that by issuing a general dispensation, there should not be an requirement for ships to produce or have a license for this period. This fact should then be conveyed to the Customs department at all ports so that no impediments arise. If the government starts with the ispensation for 3 to 5 years then only some tangible movement of container cargoes will move on the Indian coast. Capt Gautama, GM, Sea Consortium Shipping India, is perhaps the most qualified shipping executive in India. The string of qualifications to his credit are: MA(AU), MA(BU), M Sc, LLB (Bom), LLM (Bom), Dip TD, DEM, FIISA, FICA, FNMIS, FIII, MIMarTech., MIMA., etc. He is also a faculty with many management institutes. (The views expressed are purely personal) |
