India to buy second-hand vessels, cut port charges to boost exports

23 Sep 2024 CW Team

In an effort to address shipping challenges and boost exports, India will acquire five additional second-hand container vessels and reduce port charges. These measures, aimed at reducing shipping costs and increasing container capacity, were announced following a meeting chaired by Commerce and Industry Minister Piyush Goyal with officials from various ministries, export organisations, and shipping companies.

India's goods exports have seen a decline for two consecutive months, with August experiencing a 9.3% contraction due to high freight costs, a slowdown in China, and recessionary pressures in western markets. Goyal expressed confidence that the new decisions would lower shipping costs, increase the availability of empty containers, expedite export consignments, and alleviate port congestion.

The Shipping Corporation of India (SCI) will purchase five second-hand container vessels, raising container capacity by 10-12% and enhancing cargo handling efficiency. Freight rates, which have already begun to decrease, are expected to fall further. The shipping ministry also noted that port capacities have increased by 2.3 million TEUs, with an additional 9,000 TEUs set to be added.

Further measures include a reduction in storage costs for empty containers at railway yards and ports, and the implementation of more efficient customs clearance processes. To combat illegal profiteering, private container yards will now be required to register with GST authorities and eliminate cash transactions.

These initiatives, along with infrastructure improvements at Mumbai airport, are designed to ease logistical bottlenecks and strengthen India’s export competitiveness. (ET)

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