JSW Steel opposes new rule to charter foreign ships without license
PORTS & SHIPPING

JSW Steel opposes new rule to charter foreign ships without license

JSW Steel Ltd has raised strong objections to the government?s proposal to allow Indian entities to charter foreign-flagged ships without a license, provided these ships do not operate in Indian waters during the charter period. The steelmaker argues that this move would increase freight costs for steel mills, thereby reducing the global competitiveness of Indian finished steel products.

JSW Steel, one of India's leading steel producers, has urged the Ministry of Ports, Shipping, and Waterways to reconsider the proposal and minimise the licensing process to avoid unnecessary complications. According to industry sources, the metals, mining, and power sectors, which frequently ship large quantities of cargo, are likely to be adversely affected by the government's plan.

Pranab Kumar Jha, Executive Vice President and Head- Shipping, JSW Steel, pointed out that there has been a long-standing exemption from licensing requirements for chartered foreign-flagged vessels, based on a gazette notification from May 27, 1963. This exemption was intended to simplify the shipping process. Jha warned that the proposed changes would introduce unnecessary hurdles, driving up freight costs for steel mills and inflating the price of finished products. This, in turn, would burden domestic customers and weaken the international competitiveness of Indian steel.

Under Section 406 of the Merchant Shipping Act, 1958, both Indian and chartered foreign ships must obtain a license from the Directorate General of Shipping (DG Shipping) to operate. The government?s new proposal seeks to exempt Indian entities from this requirement when chartering foreign ships, provided the vessels do not enter Indian waters during the charter period.

Industry experts argue that the proposed exemption would only benefit Indian entities that charter foreign-flagged vessels for international trade, not those who use these vessels to transport cargo from overseas to Indian ports. A mining industry executive questioned the government's intentions, noting that if a foreign ship enters Indian waters, a license would still be required, which could complicate logistics and lead to delays.

With Indian-registered vessels accounting for less than 1% of the total cargo vessels operating in international waters, Jha emphasised that the proposed notification would reduce the availability of ships for Indian trade. This would lead to inefficient price discovery and increase the per-ton carrying cost, ultimately raising the cost of goods produced in India.

Obtaining approval under Section 406 can take at least two working days, which may deter international ship owners from holding their freight rates or commitments in a volatile market while Indian charterers secure the necessary licenses. Jha argued that the additional licensing process contradicts the government's goal of facilitating ease of business for Indian industries and suggested that the draft notification should be modified to streamline the licensing process.

An industry source noted that while requiring a license for coastal shipping is understandable due to the need to protect Indian tonnage, extending this requirement to international shipping could be counterproductive. The source highlighted the complexities of ship chartering and the potential disruptions that could arise from the need to obtain a license for every foreign-flagged vessel entering Indian waters.

In summary, JSW Steel and industry experts are concerned that the proposed changes will increase costs, reduce competitiveness, and complicate the logistics of shipping cargo to and from India. They are calling for the government to reconsider the proposal and ensure that the licensing process does not hinder the efficiency of the shipping industry. (ET)

JSW Steel Ltd has raised strong objections to the government?s proposal to allow Indian entities to charter foreign-flagged ships without a license, provided these ships do not operate in Indian waters during the charter period. The steelmaker argues that this move would increase freight costs for steel mills, thereby reducing the global competitiveness of Indian finished steel products. JSW Steel, one of India's leading steel producers, has urged the Ministry of Ports, Shipping, and Waterways to reconsider the proposal and minimise the licensing process to avoid unnecessary complications. According to industry sources, the metals, mining, and power sectors, which frequently ship large quantities of cargo, are likely to be adversely affected by the government's plan. Pranab Kumar Jha, Executive Vice President and Head- Shipping, JSW Steel, pointed out that there has been a long-standing exemption from licensing requirements for chartered foreign-flagged vessels, based on a gazette notification from May 27, 1963. This exemption was intended to simplify the shipping process. Jha warned that the proposed changes would introduce unnecessary hurdles, driving up freight costs for steel mills and inflating the price of finished products. This, in turn, would burden domestic customers and weaken the international competitiveness of Indian steel. Under Section 406 of the Merchant Shipping Act, 1958, both Indian and chartered foreign ships must obtain a license from the Directorate General of Shipping (DG Shipping) to operate. The government?s new proposal seeks to exempt Indian entities from this requirement when chartering foreign ships, provided the vessels do not enter Indian waters during the charter period. Industry experts argue that the proposed exemption would only benefit Indian entities that charter foreign-flagged vessels for international trade, not those who use these vessels to transport cargo from overseas to Indian ports. A mining industry executive questioned the government's intentions, noting that if a foreign ship enters Indian waters, a license would still be required, which could complicate logistics and lead to delays. With Indian-registered vessels accounting for less than 1% of the total cargo vessels operating in international waters, Jha emphasised that the proposed notification would reduce the availability of ships for Indian trade. This would lead to inefficient price discovery and increase the per-ton carrying cost, ultimately raising the cost of goods produced in India. Obtaining approval under Section 406 can take at least two working days, which may deter international ship owners from holding their freight rates or commitments in a volatile market while Indian charterers secure the necessary licenses. Jha argued that the additional licensing process contradicts the government's goal of facilitating ease of business for Indian industries and suggested that the draft notification should be modified to streamline the licensing process. An industry source noted that while requiring a license for coastal shipping is understandable due to the need to protect Indian tonnage, extending this requirement to international shipping could be counterproductive. The source highlighted the complexities of ship chartering and the potential disruptions that could arise from the need to obtain a license for every foreign-flagged vessel entering Indian waters. In summary, JSW Steel and industry experts are concerned that the proposed changes will increase costs, reduce competitiveness, and complicate the logistics of shipping cargo to and from India. They are calling for the government to reconsider the proposal and ensure that the licensing process does not hinder the efficiency of the shipping industry. (ET)

Next Story
Products

Koemmerling opens Navi Mumbai experience centre

Koemmerling, a brand of the profine Group, has expanded its presence in the Mumbai metropolitan region with the opening of a new experience centre in Navi Mumbai and launched its Allure S46 minimal sliding door system for the Indian market.Located in CBD Belapur, the facility was inaugurated by Peter Mrosik, Owner and CEO, profine Group, along with Farid Khan, Chairman and Managing Director, profine India, and Kamal Bajaj, CEO, profine India.The company said the new centre will showcase its portfolio of uPVC and aluminium window and door systems to architects, developers and homeowners.The ina..

Next Story
Products

India's waterproofing market nears Rs 150 bn milestone

India's waterproofing industry is approaching a market size of Rs 150 billion and is expected to surpass the $2 billion milestone, according to speakers at the 2nd India International Waterproofers Conference & Expo 2026 organised by the Waterproofers Association of India (WAI) in New Delhi.The two-day event brought together more than 20 speakers, 55 international delegates and 53 exhibition booths, with discussions focusing on climate-resilient construction, advanced waterproofing technologies and international collaboration.Inaugurating the event, Durga Shanker Mishra, former Secretary, ..

Next Story
Real Estate

Dilip Buildcon Q1 FY27 Revenue at Rs 23.78 billion

Dilip Buildcon Limited reported consolidated revenue from operations of Rs 2,378 crore in Q1 FY27, along with EBITDA of Rs 429 crore and profit after tax of Rs 128 crore.Consolidated EBITDA margin stood at 18.1%, improving from 17.1% in Q4 FY26. On a standalone basis, revenue from operations was Rs 1,930 crore, EBITDA stood at Rs 199 crore and PAT was Rs 39 crore, with an EBITDA margin of 10.3%.The company’s order book stood at Rs 27,691 crore as of 30 June 2026, compared with Rs 28,830 crore as of 31 March 2026. Roads and highways accounted for 17.1% of the order book, irrigation and water ..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement