GOI to exempt VSA to boost Indian container shipping presence
PORTS & SHIPPING

GOI to exempt VSA to boost Indian container shipping presence

The Indian government is considering exempting Vessel Sharing Agreements (VSAs) in the container shipping sector from the country’s antitrust regulations for three years, provided that Indian-flagged vessels account for at least 5% of the total space under such agreements and that a similar 5% is allocated to Indian non-vessel operating common carriers (NVOCCs), according to a draft notification.

The draft aims to enhance competition, promote transparency, and ensure better representation of Indian shipping lines and NVOCCs in the global container trade, while balancing the interests of stakeholders in the maritime sector, the Directorate General of Shipping (DG Shipping) stated.

A non-vessel operating common carrier is a logistics provider that consolidates cargo without owning or operating ships, acting as an intermediary between shipping companies and their customers. The DG Shipping will oversee VSA operations to ensure compliance with these conditions during the three-year exemption from Section 3 of the Competition Act. Any suspected violations, such as non-transparent fees or discriminatory practices, will be investigated, and the findings shared with the Competition Commission of India.

VSAs among container lines have been exempted from India’s antitrust regulations since 2012, with the most recent exemption ending in July after a three-year extension. The current exemption applies to carriers of any nationality operating from Indian ports, provided they do not engage in practices like price-fixing or market allocation.

Indian ship owners have a minimal presence in the global container trade, with nearly 99% of India’s export-import container traffic managed by international carriers such as Mediterranean Shipping Company, Maersk, CMA CGM, Hapag Lloyd, and others. The state-run Shipping Corporation of India Ltd (SCI), the only Indian mainline container operator, currently manages two container ships and two hired vessels, with just one vessel participating in the IPAK service run by Mediterranean Shipping Company on the India-Europe route.

The disruption of the global supply chain during the pandemic, coupled with geopolitical tensions in the Middle East, has led local exporters to push for a national container shipping company to reduce dependence on foreign carriers. To address this, SCI is planning to acquire four more second-hand container ships, in addition to the one for which it had floated a tender earlier this year, as stated by Chairman and Managing Director Captain Binesh Kumar Tyagi.

At a recent meeting chaired by Commerce Minister Piyush Goyal on September 18 to address exporters' challenges, the Ministry of Ports, Shipping and Waterways announced that SCI would acquire five container ships. "Some of these will be 8,000-12,000 twenty-foot equivalent units (TEU) capacity vessels, while 1-2 smaller ships may be used for coastal operations," Capt. Tyagi said, adding that actions are underway as directed by the ministry.

Meanwhile, The Great Eastern Shipping Company Ltd, India’s largest private ocean carrier, is also evaluating the possibility of entering the container shipping market. “We will evaluate the container (shipping) space. It’s on our radar but not a priority at the moment,” said Rahul Sheth, General Manager, during the company’s earnings call on August 1.

(ET)

The Indian government is considering exempting Vessel Sharing Agreements (VSAs) in the container shipping sector from the country’s antitrust regulations for three years, provided that Indian-flagged vessels account for at least 5% of the total space under such agreements and that a similar 5% is allocated to Indian non-vessel operating common carriers (NVOCCs), according to a draft notification. The draft aims to enhance competition, promote transparency, and ensure better representation of Indian shipping lines and NVOCCs in the global container trade, while balancing the interests of stakeholders in the maritime sector, the Directorate General of Shipping (DG Shipping) stated. A non-vessel operating common carrier is a logistics provider that consolidates cargo without owning or operating ships, acting as an intermediary between shipping companies and their customers. The DG Shipping will oversee VSA operations to ensure compliance with these conditions during the three-year exemption from Section 3 of the Competition Act. Any suspected violations, such as non-transparent fees or discriminatory practices, will be investigated, and the findings shared with the Competition Commission of India. VSAs among container lines have been exempted from India’s antitrust regulations since 2012, with the most recent exemption ending in July after a three-year extension. The current exemption applies to carriers of any nationality operating from Indian ports, provided they do not engage in practices like price-fixing or market allocation. Indian ship owners have a minimal presence in the global container trade, with nearly 99% of India’s export-import container traffic managed by international carriers such as Mediterranean Shipping Company, Maersk, CMA CGM, Hapag Lloyd, and others. The state-run Shipping Corporation of India Ltd (SCI), the only Indian mainline container operator, currently manages two container ships and two hired vessels, with just one vessel participating in the IPAK service run by Mediterranean Shipping Company on the India-Europe route. The disruption of the global supply chain during the pandemic, coupled with geopolitical tensions in the Middle East, has led local exporters to push for a national container shipping company to reduce dependence on foreign carriers. To address this, SCI is planning to acquire four more second-hand container ships, in addition to the one for which it had floated a tender earlier this year, as stated by Chairman and Managing Director Captain Binesh Kumar Tyagi. At a recent meeting chaired by Commerce Minister Piyush Goyal on September 18 to address exporters' challenges, the Ministry of Ports, Shipping and Waterways announced that SCI would acquire five container ships. Some of these will be 8,000-12,000 twenty-foot equivalent units (TEU) capacity vessels, while 1-2 smaller ships may be used for coastal operations, Capt. Tyagi said, adding that actions are underway as directed by the ministry. Meanwhile, The Great Eastern Shipping Company Ltd, India’s largest private ocean carrier, is also evaluating the possibility of entering the container shipping market. “We will evaluate the container (shipping) space. It’s on our radar but not a priority at the moment,” said Rahul Sheth, General Manager, during the company’s earnings call on August 1. (ET)

Next Story
Infrastructure Transport

Titagarh Rail Systems Launches Third Diving Support Craft for Indian Navy

Titagarh Rail Systems (TRSL) marked another milestone in its shipbuilding journey with the launch of the third indigenously built Diving Support Craft (DSC) for the Indian Navy. The vessel is part of a series of five DSCs being constructed by TRSL under the Ministry of Defence’s Make in India initiative.The launch ceremony was graced by Kangana Berry, wife of Vice Admiral Suraj Berry, AVSM, NM, VSM, Commander-in-Chief, who performed the traditional naming and launch. The vessel was side-launched into the Hooghly River at 16:10 hrs.Diving Support Crafts are catamaran-type vessels designed wit..

Next Story
Infrastructure Transport

Concord Control Systems Secures First Kavach 4.0 Order via Progota India

Concord Control Systems (CNCRD), a leading manufacturer of embedded electronic systems and critical electronic solutions, has secured its first order for Kavach 4.0 through associate company Progota India. Valued at Rs 190.45 million, the order represents the start of large-scale implementation opportunities for advanced railway safety systems in India.With this milestone, Concord will become one of the few railway companies to have a fully developed Kavach system approved for supply to Indian Railways. The next-generation Kavach has successfully advanced through the stringent approval journey..

Next Story
Infrastructure Urban

Awfis Delivers 67,000 sq ft Innovation Hub for eBay in Bengaluru

Awfis Space Solutions, India’s largest flexible workspace provider and the country’s first publicly listed workspace solutions platform, has added eBay to its growing list of prestigious global capability centre (GCC) clients. Awfis has designed, built, and will manage a ~67,000 sq ft innovation hub for eBay at Embassy Tech Village, Bengaluru, supporting the e-commerce leader’s AI-first commerce strategy.The new centre will function as a strategic hub, advancing artificial intelligence, engineering, product development, and applied research, while further strengthening eBay’s growth in..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?