India plans new shipping venture to tap into expanding trade revenue
The yet-to-be-named company will be jointly owned by state-run entities in the oil, gas, and fertilizer sectors, along with the state-owned Shipping Corp of India and foreign firms. Requests for comments from India's oil and shipping ministries went unanswered.
Sources, speaking on condition of anonymity, stated that the goal is to reduce freight expenses to foreign companies by at least one-third by 2047. One of the sources, who is familiar with the matter, mentioned, "Current projections indicate that freight costs could reach $400 billion as exports and imports increase by 2047."
In the financial year 2019/20, Indian companies reportedly paid $85 billion in freight costs, with $75 billion allocated for foreign vessels. This shift towards foreign carriers is attributed to India's shipping fleet not keeping pace with its expanding trade, especially in energy imports and exports of refined oil products.
India currently has around 1,500 large vessels, including tankers, gas carriers, container ships, and dry bulk carriers. In January, India's oil and shipping ministries agreed that all state-run oil firms, along with the planned company, would collaborate. A government document revealed plans to leverage the expertise of the Shipping Corp of India in tanker acquisition, ownership, operations, and other shipping-related areas.
Additionally, on May 16, the two ministries established a joint working group comprising government and industry representatives to formulate a strategic plan, as per the document.